Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 04, 2020 | |
Class of Stock [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 000-55605 | |
Entity Registrant Name | Griffin Capital Essential Asset REIT, Inc. | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 46-4654479 | |
Entity Address, Address Line One | 1520 E. Grand Ave | |
Entity Address, City or Town | El Segundo | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 90245 | |
City Area Code | 310 | |
Local Phone Number | 469-6100 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001600626 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --12-31 | |
Common Class T | ||
Class of Stock [Line Items] | ||
Entity Common Stock, Shares Outstanding | 557,323 | |
Common Class S | ||
Class of Stock [Line Items] | ||
Entity Common Stock, Shares Outstanding | 1,802 | |
Common Class D | ||
Class of Stock [Line Items] | ||
Entity Common Stock, Shares Outstanding | 40,995 | |
Common Class I | ||
Class of Stock [Line Items] | ||
Entity Common Stock, Shares Outstanding | 1,898,261 | |
Common Class A | ||
Class of Stock [Line Items] | ||
Entity Common Stock, Shares Outstanding | 24,297,795 | |
Common Class AA | ||
Class of Stock [Line Items] | ||
Entity Common Stock, Shares Outstanding | 47,323,442 | |
Common Class AAA | ||
Class of Stock [Line Items] | ||
Entity Common Stock, Shares Outstanding | 919,876 | |
Common Class E | ||
Class of Stock [Line Items] | ||
Entity Common Stock, Shares Outstanding | 155,290,144 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 | |
ASSETS | |||
Cash and cash equivalents | $ 181,732 | $ 54,830 | |
Restricted cash | 35,831 | 58,430 | |
Real estate: | |||
Land | 451,696 | 458,339 | |
Building and improvements | 3,114,726 | 3,043,527 | |
Tenant origination and absorption cost | 745,039 | 744,773 | |
Construction in progress | 16,167 | 31,794 | |
Total real estate | 4,327,628 | 4,278,433 | |
Less: accumulated depreciation and amortization | (781,689) | (668,104) | |
Total real estate, net | 3,545,939 | 3,610,329 | |
Investments in unconsolidated entities | 34 | 11,028 | |
Intangible assets, net | 10,651 | 12,780 | |
Deferred rent receivable | 92,433 | 73,012 | |
Deferred leasing costs, net | 48,275 | 49,390 | |
Goodwill | 229,948 | 229,948 | |
Due from affiliates | 987 | 837 | |
Right of use asset | 40,286 | 41,347 | |
Other assets | 37,834 | 33,571 | |
Total assets | 4,223,950 | 4,175,502 | |
LIABILITIES AND EQUITY | |||
Debt, net | 2,174,352 | 1,969,104 | |
Restricted reserves | 14,115 | 14,064 | |
Interest rate swap liability | 58,852 | 24,146 | |
Redemptions payable | 6,145 | 96,648 | |
Distributions payable | 9,095 | 15,530 | |
Due to affiliates | 5,155 | 10,883 | |
Intangible liabilities, net | 28,548 | 31,805 | |
Lease liability | 45,486 | 45,020 | |
Accrued expenses and other liabilities | 118,257 | 96,389 | |
Total liabilities | 2,460,005 | 2,303,589 | |
Commitments and contingencies | |||
Noncontrolling interests subject to redemption; 556,099 and 554,110 units as of September 30, 2020 and December 31, 2019, respectively | 4,569 | 4,831 | |
Stockholders’ equity: | |||
Common stock, $0.001 par value; 800,000,000 shares authorized; 229,897,937 and 227,853,720 shares outstanding in the aggregate as of June 30, 2020 and December 31, 2019, respectively | [1] | 230 | 228 |
Additional paid-in capital | 2,100,047 | 2,060,604 | |
Cumulative distributions | (793,546) | (715,792) | |
Accumulated earnings | 148,743 | 153,312 | |
Accumulated other comprehensive loss | (52,322) | (21,875) | |
Total stockholders’ equity | 1,403,152 | 1,476,477 | |
Noncontrolling interests | 229,892 | 245,040 | |
Total equity | 1,633,044 | 1,721,517 | |
Total liabilities and equity | 4,223,950 | 4,175,502 | |
Perpetual convertible preferred shares | |||
LIABILITIES AND EQUITY | |||
Perpetual convertible preferred stock and common stock subject to redemption | 125,000 | 125,000 | |
Common stock subject to redemption | |||
LIABILITIES AND EQUITY | |||
Perpetual convertible preferred stock and common stock subject to redemption | $ 1,332 | $ 20,565 | |
[1] | See Note 9, Equity , for the number of shares outstanding of each class of common stock as of September 30, 2020. |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Noncontrolling interest, units eligible towards redemption (in shares) | 556,099 | 554,110 |
Common Stock, par value (in usd per share) | $ 0.001 | $ 0.001 |
Common Stock, shares authorized (in shares) | 800,000,000 | 800,000,000 |
Common Stock, shares outstanding (in shares) | 229,775,115 | 227,853,720 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Revenue: | ||||
Rental income | $ 100,002 | $ 97,435 | $ 301,157 | $ 277,276 |
Expenses: | ||||
Property operating expense | 14,265 | 14,717 | 42,158 | 39,091 |
Property tax expense | 9,330 | 10,050 | 28,291 | 27,722 |
Property management fees to non-affiliates | 1,032 | 822 | 2,780 | 2,620 |
General and administrative expenses | 8,207 | 7,519 | 23,280 | 17,708 |
Corporate operating expenses to affiliates | 625 | 729 | 1,875 | 1,453 |
Impairment provision | 9,572 | 0 | 22,195 | 0 |
Depreciation and amortization | 39,918 | 41,440 | 120,947 | 112,311 |
Total expenses | 82,949 | 75,277 | 241,526 | 200,905 |
Income before other income and (expenses) | 17,053 | 22,158 | 59,631 | 76,371 |
Other income (expenses): | ||||
Interest expense | (20,314) | (19,560) | (59,321) | (53,642) |
Other income (loss), net | 238 | (1,850) | 3,292 | (370) |
(Loss) Gain from investment in unconsolidated entities | (4,452) | 3,027 | (6,523) | 1,919 |
Management fee revenue from affiliates | 0 | 0 | 0 | 6,368 |
Gain from disposition of assets | 0 | 8,441 | 4,268 | 8,441 |
Net (loss) income | (7,475) | 12,216 | 1,347 | 39,087 |
Distributions to redeemable preferred shareholders | (2,255) | (2,047) | (6,349) | (6,141) |
Net loss (income) attributable to noncontrolling interests | 1,166 | (1,149) | 598 | (4,226) |
Net (loss) income attributable to controlling interest | (8,564) | 9,020 | (4,404) | 28,720 |
Distributions to redeemable noncontrolling interests attributable to common stockholders | (43) | (81) | (165) | (240) |
Net (loss) income attributable to common stockholders | $ (8,607) | $ 8,939 | $ (4,569) | $ 28,480 |
Net (loss) income attributable to common stockholders per share, basic and diluted (in usd per share) | $ (0.04) | $ 0.04 | $ (0.02) | $ 0.13 |
Weighted average number of common shares outstanding, basic and diluted (in shares) | 230,159,620 | 246,609,614 | 229,950,613 | 217,375,026 |
Cash distributions declared per common share (in usd per share) | $ 0.09 | $ 0.13 | $ 0.32 | $ 0.46 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net (loss) income | $ (7,475) | $ 12,216 | $ 1,347 | $ 39,087 |
Other comprehensive loss: | ||||
Equity in other comprehensive (loss) income of unconsolidated joint venture | 0 | (73) | 0 | (251) |
Change in fair value of swap agreements | 2,498 | (7,318) | (34,612) | (28,080) |
Total comprehensive (loss) income | (4,977) | 4,825 | (33,265) | 10,756 |
Distributions to redeemable preferred shareholders | (2,255) | (2,047) | (6,349) | (6,141) |
Distributions to redeemable noncontrolling interests attributable to common stockholders | (43) | (81) | (165) | (240) |
Comprehensive loss (income) attributable to noncontrolling interests | 867 | (314) | 4,762 | (494) |
Comprehensive (loss) income attributable to common stockholders | $ (6,408) | $ 2,383 | $ (35,017) | $ 3,881 |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands | Total | Total Stockholders’ Equity | Common Stock | Additional Paid-In Capital | Cumulative Distributions | Accumulated Income | Accumulated Other Comprehensive Loss | Non- controlling Interests |
Beginning Balance (in shares) at Dec. 31, 2018 | 174,278,341 | |||||||
Beginning Balance at Dec. 31, 2018 | $ 1,344,286 | $ 1,112,083 | $ 174 | $ 1,556,770 | $ (570,977) | $ 128,525 | $ (2,409) | $ 232,203 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Deferred equity compensation (in shares) | 7,336 | |||||||
Deferred equity compensation | 75 | 75 | 75 | |||||
Cash distributions to common stockholders | (21,803) | (21,803) | (21,803) | |||||
Issuance of shares for distribution reinvestment plan (in shares) | 695,872 | |||||||
Issuance of shares for distribution reinvestment plan | 0 | $ 1 | 6,672 | (6,673) | ||||
Reclass of common stock subject to redemption | (6,673) | (6,673) | (6,673) | |||||
Distributions to noncontrolling interest | (4,585) | (4,585) | ||||||
Distributions to noncontrolling interests subject to redemption | (13) | (13) | ||||||
Offering costs | (9) | (9) | (9) | |||||
Net income | 6,530 | 5,333 | 5,333 | 1,197 | ||||
Other comprehensive loss | (8,137) | (6,729) | (6,729) | (1,408) | ||||
Ending Balance(in shares) at Mar. 31, 2019 | 174,981,549 | |||||||
Ending Balance at Mar. 31, 2019 | 1,309,671 | 1,082,277 | $ 175 | 1,556,835 | (599,453) | 133,858 | (9,138) | 227,394 |
Beginning Balance (in shares) at Dec. 31, 2018 | 174,278,341 | |||||||
Beginning Balance at Dec. 31, 2018 | 1,344,286 | 1,112,083 | $ 174 | 1,556,770 | (570,977) | 128,525 | (2,409) | 232,203 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Mergers | 751,278 | |||||||
Ending Balance(in shares) at Sep. 30, 2019 | 235,382,622 | |||||||
Ending Balance at Sep. 30, 2019 | 1,839,630 | 1,590,455 | $ 236 | 2,137,112 | (676,890) | 157,005 | (27,008) | 249,175 |
Beginning Balance (in shares) at Dec. 31, 2018 | 174,278,341 | |||||||
Beginning Balance at Dec. 31, 2018 | $ 1,344,286 | 1,112,083 | $ 174 | 1,556,770 | (570,977) | 128,525 | (2,409) | 232,203 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Reclass of noncontrolling interest subject to redemption | 0 | |||||||
Repurchase of noncontrolling interest | 0 | |||||||
Issuance of stock dividend for noncontrolling interest | 1,861 | |||||||
Distributions to noncontrolling interest | (19,716) | |||||||
Net income | 3,749 | |||||||
Other comprehensive loss | (3,054) | |||||||
Ending Balance(in shares) at Dec. 31, 2019 | 227,853,720 | 227,853,720 | ||||||
Ending Balance at Dec. 31, 2019 | $ 1,721,517 | 1,476,477 | $ 228 | 2,060,604 | (715,792) | 153,312 | (21,875) | 245,040 |
Beginning Balance (in shares) at Mar. 31, 2019 | 174,981,549 | |||||||
Beginning Balance at Mar. 31, 2019 | 1,309,671 | 1,082,277 | $ 175 | 1,556,835 | (599,453) | 133,858 | (9,138) | 227,394 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Deferred equity compensation (in shares) | 349 | |||||||
Deferred equity compensation | 648 | 648 | 648 | |||||
Cash distributions to common stockholders | (26,296) | (26,296) | (26,296) | |||||
Issuance of shares for distribution reinvestment plan (in shares) | 921,864 | |||||||
Issuance of shares for distribution reinvestment plan | 0 | $ 1 | 8,805 | (8,806) | ||||
Repurchase of common stock (in shares) | (10,348,142) | |||||||
Repurchase of common stock | (98,928) | (98,928) | $ (10) | (98,918) | ||||
Reclass of common stock subject to redemption | (19,175) | (19,175) | (19,175) | |||||
Issuance of limited partnership units | 25,000 | 25,000 | ||||||
Issuance of stock dividend for noncontrolling interest | 269 | 269 | ||||||
Issuance of stock dividends | (2,067) | (2,067) | (2,067) | |||||
Mergers (in shares) | 78,054,934 | |||||||
Mergers | 751,277 | 746,238 | $ 78 | 746,160 | 5,039 | |||
Distributions to noncontrolling interest | (4,903) | (4,903) | ||||||
Distributions to noncontrolling interests subject to redemption | (11) | (11) | ||||||
Offering costs | (181) | (181) | (181) | |||||
Net income | 16,088 | 14,208 | 14,208 | 1,880 | ||||
Other comprehensive loss | (12,803) | (11,314) | (11,314) | (1,489) | ||||
Ending Balance(in shares) at Jun. 30, 2019 | 243,610,554 | |||||||
Ending Balance at Jun. 30, 2019 | 1,938,589 | 1,685,410 | $ 244 | 2,194,174 | (636,622) | 148,066 | (20,452) | 253,179 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Gross proceeds from issuance of common stock (in shares) | 264,624 | |||||||
Gross proceeds from issuance of common stock | 2,576 | 2,576 | 2,576 | |||||
Deferred equity compensation (in shares) | 0 | |||||||
Deferred equity compensation | 950 | 950 | 950 | |||||
Cash distributions to common stockholders | (21,204) | (21,204) | (21,204) | |||||
Issuance of shares for distribution reinvestment plan (in shares) | 1,377,885 | |||||||
Issuance of shares for distribution reinvestment plan | 242 | 242 | $ 1 | 13,140 | (12,899) | |||
Repurchase of common stock (in shares) | (10,524,436) | |||||||
Repurchase of common stock | (100,361) | (100,361) | $ (10) | (100,351) | ||||
Reclass of common stock subject to redemption | 21,510 | 21,510 | 21,510 | |||||
Issuance of stock dividend for noncontrolling interest | 800 | 800 | ||||||
Issuance of stock dividends (in shares) | 653,995 | |||||||
Issuance of stock dividends | 55 | 55 | $ 1 | 6,219 | (6,165) | |||
Distributions to noncontrolling interest | (5,108) | (5,108) | ||||||
Distributions to noncontrolling interests subject to redemption | (10) | (10) | ||||||
Offering costs | (1,106) | (1,106) | (1,106) | |||||
Net income | 10,088 | 8,939 | 8,939 | 1,149 | ||||
Other comprehensive loss | (7,391) | (6,556) | (6,556) | (835) | ||||
Ending Balance(in shares) at Sep. 30, 2019 | 235,382,622 | |||||||
Ending Balance at Sep. 30, 2019 | $ 1,839,630 | 1,590,455 | $ 236 | 2,137,112 | (676,890) | 157,005 | (27,008) | 249,175 |
Beginning Balance (in shares) at Dec. 31, 2019 | 227,853,720 | 227,853,720 | ||||||
Beginning Balance at Dec. 31, 2019 | $ 1,721,517 | 1,476,477 | $ 228 | 2,060,604 | (715,792) | 153,312 | (21,875) | 245,040 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Gross proceeds from issuance of common stock (in shares) | 433,328 | |||||||
Gross proceeds from issuance of common stock | 4,141 | 4,141 | 4,141 | |||||
Deferred equity compensation (in shares) | 17,836 | |||||||
Deferred equity compensation | 984 | 984 | 984 | |||||
Cash distributions to common stockholders | (23,627) | (23,627) | (23,627) | |||||
Issuance of shares for distribution reinvestment plan (in shares) | 1,297,656 | |||||||
Issuance of shares for distribution reinvestment plan | 4,155 | 4,155 | $ 1 | 12,116 | (7,962) | |||
Repurchase of common stock (in shares) | (548,312) | |||||||
Repurchase of common stock | (5,110) | (5,110) | (5,110) | |||||
Reclass of common stock subject to redemption | (85,180) | (85,180) | (85,180) | |||||
Issuance of stock dividend for noncontrolling interest | 802 | 802 | ||||||
Issuance of stock dividends (in shares) | 617,327 | |||||||
Issuance of stock dividends | 19 | 19 | $ 1 | 5,766 | (5,748) | |||
Distributions to noncontrolling interest | (5,069) | (5,069) | ||||||
Distributions to noncontrolling interests subject to redemption | (11) | (11) | ||||||
Offering costs | (604) | (604) | (604) | |||||
Net income | 848 | 737 | 737 | 111 | ||||
Other comprehensive loss | (30,826) | (27,118) | (27,118) | (3,708) | ||||
Ending Balance(in shares) at Mar. 31, 2020 | 229,671,555 | |||||||
Ending Balance at Mar. 31, 2020 | $ 1,582,039 | 1,344,874 | $ 230 | 1,992,717 | (753,129) | 154,049 | (48,993) | 237,165 |
Beginning Balance (in shares) at Dec. 31, 2019 | 227,853,720 | 227,853,720 | ||||||
Beginning Balance at Dec. 31, 2019 | $ 1,721,517 | 1,476,477 | $ 228 | 2,060,604 | (715,792) | 153,312 | (21,875) | 245,040 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Reclass of noncontrolling interest subject to redemption | 263 | |||||||
Repurchase of noncontrolling interest | (1,137) | |||||||
Issuance of stock dividend for noncontrolling interest | 1,068 | |||||||
Mergers | $ 0 | |||||||
Distributions to noncontrolling interest | (10,556) | |||||||
Net income | (598) | |||||||
Other comprehensive loss | (4,165) | |||||||
Ending Balance(in shares) at Sep. 30, 2020 | 229,775,115 | 229,775,115 | ||||||
Ending Balance at Sep. 30, 2020 | $ 1,633,044 | 1,403,152 | $ 230 | 2,100,047 | (793,546) | 148,743 | (52,322) | 229,892 |
Beginning Balance (in shares) at Mar. 31, 2020 | 229,671,555 | |||||||
Beginning Balance at Mar. 31, 2020 | 1,582,039 | 1,344,874 | $ 230 | 1,992,717 | (753,129) | 154,049 | (48,993) | 237,165 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Deferred equity compensation (in shares) | 20,138 | |||||||
Deferred equity compensation | 1,139 | 1,139 | 1,139 | |||||
Cash distributions to common stockholders | (20,087) | (20,087) | (20,087) | |||||
Issuance of shares for distribution reinvestment plan (in shares) | (220) | |||||||
Issuance of shares for distribution reinvestment plan | 0 | (2) | 2 | |||||
Repurchase of common stock (in shares) | (301) | |||||||
Repurchase of common stock | (3) | (3) | (3) | |||||
Reclass of noncontrolling interest subject to redemption | 253 | 253 | ||||||
Repurchase of noncontrolling interest | (496) | (496) | ||||||
Reclass of common stock subject to redemption | 105,745 | 105,745 | 105,745 | |||||
Issuance of stock dividend for noncontrolling interest | 266 | 266 | ||||||
Issuance of stock dividends (in shares) | 206,765 | |||||||
Issuance of stock dividends | 1,922 | 1,922 | 1,922 | 0 | ||||
Distributions to noncontrolling interest | (2,731) | (2,731) | ||||||
Distributions to noncontrolling interests subject to redemption | (6) | (6) | ||||||
Offering costs | (26) | (26) | (26) | |||||
Net income | 3,758 | 3,301 | 3,301 | 457 | ||||
Other comprehensive loss | (6,284) | (5,528) | (5,528) | (756) | ||||
Ending Balance(in shares) at Jun. 30, 2020 | 229,897,937 | |||||||
Ending Balance at Jun. 30, 2020 | 1,665,489 | 1,431,337 | $ 230 | 2,101,492 | (773,214) | 157,350 | (54,521) | 234,152 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Deferred equity compensation (in shares) | 0 | |||||||
Deferred equity compensation | 992 | 992 | 992 | |||||
Cash distributions to common stockholders | (12,856) | (12,856) | (12,856) | |||||
Issuance of shares for distribution reinvestment plan (in shares) | 570,377 | |||||||
Issuance of shares for distribution reinvestment plan | (2,425) | (2,425) | $ 1 | 5,050 | (7,476) | |||
Repurchase of common stock (in shares) | (693,199) | |||||||
Repurchase of common stock | (6,145) | (6,145) | $ (1) | (6,144) | ||||
Reclass of noncontrolling interest subject to redemption | 10 | 10 | ||||||
Repurchase of noncontrolling interest | (641) | (641) | ||||||
Reclass of common stock subject to redemption | (1,331) | (1,331) | (1,331) | |||||
Distributions to noncontrolling interest | (2,756) | (2,756) | ||||||
Distributions to noncontrolling interests subject to redemption | (6) | (6) | ||||||
Offering costs | (12) | (12) | (12) | |||||
Net income | (9,773) | (8,607) | (8,607) | (1,166) | ||||
Other comprehensive loss | $ 2,498 | 2,199 | 2,199 | 299 | ||||
Ending Balance(in shares) at Sep. 30, 2020 | 229,775,115 | 229,775,115 | ||||||
Ending Balance at Sep. 30, 2020 | $ 1,633,044 | $ 1,403,152 | $ 230 | $ 2,100,047 | $ (793,546) | $ 148,743 | $ (52,322) | $ 229,892 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Operating Activities: | ||
Net (loss) income | $ 1,347 | $ 39,087 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation of building and building improvements | 69,956 | 57,473 |
Amortization of leasing costs and intangibles, including ground leasehold interests and leasing costs | 50,990 | 54,838 |
Amortization of below market leases, net | (1,765) | (2,639) |
Amortization of deferred financing costs and debt premium | 1,929 | 4,926 |
Amortization of swap interest | 95 | 94 |
Deferred rent | (19,442) | (9,655) |
Deferred rent, ground lease | 1,548 | 1,129 |
Termination fee revenue - receivable from tenant, net | 0 | (7,501) |
Gain from disposition of assets | (4,268) | (8,441) |
Gain on fair value of earn-out | (2,581) | 0 |
Loss (Income) from investment in unconsolidated entities | 2,071 | (1,919) |
Investment in unconsolidated entities valuation adjustment | 4,452 | 0 |
Impairment provision | 22,195 | 0 |
(Gain) Loss from investments | (118) | 457 |
Stock-based compensation | 3,116 | 1,673 |
Performance distribution allocation (non-cash) | 0 | (2,604) |
Change in operating assets and liabilities: | ||
Deferred leasing costs and other assets | (3,758) | (5,380) |
Restricted reserves | 382 | (79) |
Accrued expenses and other liabilities | 5,598 | (8,943) |
Due to affiliates, net | (2,794) | 6,907 |
Net cash provided by operating activities | 128,953 | 119,423 |
Investing Activities: | ||
Cash acquired in connection with the Mergers, net of acquisition costs | 0 | 25,321 |
Acquisition of properties, net | (16,584) | (37,781) |
Proceeds from disposition of properties | 23,480 | 46,784 |
Restricted reserves | 159 | 2,030 |
Payments for construction in progress | (41,981) | (29,447) |
Real estate acquisition deposits | 1,047 | 0 |
Distributions of capital from investment in unconsolidated entities | 8,530 | 13,189 |
Contributions of capital for investment in unconsolidated entities | (8,160) | 0 |
Purchase of investments | (950) | (8,353) |
Net cash (used in) provided by investing activities | (34,459) | 11,743 |
Financing Activities: | ||
Proceeds from borrowings - KeyBank Loans | 0 | 627,000 |
Proceeds from borrowings - Revolver Loan | 215,000 | 215,854 |
Principal payoff of secured indebtedness - Unsecured Credit Facility - EA-1 | (25,000) | (715,000) |
Principal payoff of secured indebtedness - Revolver Loan | 0 | (44,439) |
Principal amortization payments on secured indebtedness | (5,341) | (4,903) |
Offering costs | (490) | (1,707) |
Repurchase of common stock | (101,761) | (98,928) |
Repurchase of noncontrolling interest | (1,137) | 0 |
Deferred financing costs | (145) | (5,737) |
Issuance of common stock, net of discounts and underwriting costs | 4,699 | 2,789 |
Distributions to noncontrolling interests | (10,521) | (12,506) |
Distributions to preferred units subject to redemption | (6,141) | (6,141) |
Distributions to common stockholders | (59,354) | (69,558) |
Net cash provided by (used in) financing activities | 9,809 | (113,276) |
Net increase in cash, cash equivalents and restricted cash | 104,303 | 17,890 |
Cash, cash equivalents and restricted cash at the beginning of the period | 113,260 | 64,285 |
Cash, cash equivalents and restricted cash at the end of the period | 217,563 | 82,175 |
Supplemental Disclosures of Significant Non-Cash Transactions: | ||
Decrease in fair value swap agreement | (34,612) | (28,080) |
Distributions payable to common stockholders | 6,638 | 13,105 |
Distributions payable to noncontrolling interests | 913 | 1,697 |
Common stock issued pursuant to the distribution reinvestment plan | 17,165 | 28,378 |
Issuance of limited partnership units | 0 | 25,000 |
Issuance of stock dividends | 5,747 | 6,165 |
Common stock redemptions funded subsequent to period-end | (6,145) | (100,362) |
Mortgage debt assumed in conjunction with the acquisition of real estate assets plus a premium of $109 | 18,884 | 0 |
Payable for construction in progress | 6,902 | 4,855 |
Accrued tenant obligations | 26,891 | 0 |
Net assets acquired in Merger in exchange for common shares | 0 | 751,278 |
Implied EA-1 common stock and operating partnership units issued in exchange for net assets acquired in Merger | 0 | 751,278 |
Operating lease right-of-use assets obtained in exchange for lease liabilities upon adoption of ASC 842 on January 1, 2019 | $ 0 | $ 25,521 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) $ in Thousands | Sep. 30, 2020USD ($) |
Statement of Cash Flows [Abstract] | |
Premium on debt assumed | $ 109 |
Organization
Organization | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization Griffin Capital Essential Asset REIT, Inc. (“GCEAR”) is a internally managed real estate investment trust ("REIT") organized primarily with the purpose of acquiring single tenant office and industrial net lease properties essential to the business operations of the tenant. GCEAR’s year-end date is December 31. On December 14, 2018, GCEAR, Griffin Capital Essential Asset Operating Partnership II, L.P. (the “GCEAR II Operating Partnership”), GCEAR’s wholly-owned subsidiary Globe Merger Sub, LLC (“Merger Sub”), the entity formerly known as Griffin Capital Essential Asset REIT, Inc. (“EA-1”), and Griffin Capital Essential Asset Operating Partnership, L.P. (the “EA-1 Operating Partnership”) entered into an Agreement and Plan of Merger (the “Merger Agreement”). On April 30, 2019, pursuant to the Merger Agreement, (i) EA-1 merged with and into Merger Sub, with Merger Sub surviving as GCEAR’s direct, wholly-owned subsidiary (the “Company Merger”) and (ii) the GCEAR II Operating Partnership merged with and into the EA-1 Operating Partnership (the “Partnership Merger” and, together with the Company Merger, the “Mergers”), with the EA-1 Operating Partnership (and now known as the “Current Operating Partnership”) surviving the Partnership Merger. In addition, on April 30, 2019, following the Mergers, Merger Sub merged into GCEAR. In connection with the Mergers, the Company converted EA-1’s Series A cumulative perpetual convertible preferred stock into GCEAR’s newly created Series A cumulative perpetual convertible preferred stock (the “Series A Preferred Shares”). Also on April 30, 2019, the Company converted each EA-1 Operating Partnership unit outstanding into 1.04807 Class E units in the Current Operating Partnership and each unit outstanding in the GCEAR II Operating Partnership converted into one unit of like class in the Current Operating Partnership (the “OP Units”). The Current Operating Partnership and Griffin Capital Real Estate Company, LLC ("GRECO") are the subsidiaries of the Company and are the entities through which the Company conducts its business. In addition, on December 14, 2018, EA-1 and the EA-1 Operating Partnership entered into a series of transactions, agreements, and amendments to EA-1’s existing agreements and arrangements with EA-1’s former sponsor, Griffin Capital Company, LLC ("GCC"), and Griffin Capital, LLC (“GC LLC”), pursuant to which GCC and GC LLC contributed all of the membership interests of GRECO (including the GRECO employees) and certain assets related to the business of GRECO to the EA-1 Operating Partnership (the "Self-Administration Transaction"). As a result of the Self-Administration Transaction, EA-1 became self-managed and acquired the advisory, asset management and property management business of GRECO. In connection with the Mergers, many of the agreements and amendments entered into by EA-1 as part of the Self-Administration Transaction were assumed by GCEAR pursuant to the Mergers. In connection with the Mergers, GCEAR was the legal acquirer and EA-1 was the accounting acquirer for financial reporting purposes. T hus, the financial information set forth herein subsequent to the Mergers reflects results of the combined entity, and the financial information set forth herein prior to the Mergers reflects EA-1’s results. For this reason, period to period comparisons may not be meaningful. Unless the context requires otherwise, all references to the “Company,” “we,” “our,” and “us” herein mean EA-1 and one or more of EA-1’s subsidiaries for periods prior to the Mergers, and GCEAR and one or more of GCEAR’s subsidiaries, including GRECO and the Current Operating Partnership, for periods following the Mergers. Certain historical information of GCEAR is included for background purposes. On September 20, 2017, GCEAR commenced a follow-on offering of up to $2.2 billion of shares (the “Follow-On Offering”), consisting of up to $2.0 billion of shares in GCEAR’s primary offering and $0.2 billion of shares pursuant to its distribution reinvestment plan ("DRP"). Since September 20, 2017, the Company had issued 12,250,750 shares of common stock for aggregate gross proceeds of approximately $116.4 million in these offerings. See Note 9, Equity , for the status of the Follow-On Offering and DRP. The Current Operating Partnership owns, directly or indirectly, all of the properties that the Company has acquired. As of September 30, 2020, the Company owned approximat ely 87.8% of the OP Units of the Current Operating Partnership. As a result of the contribution of five properties to the Company and the Self-Administration Transaction, the former sponsor and certain of its affiliates owned approximately 10.6% of t he limited partnership units of the Current Operating Partnership, including approximately 2.4 million units owned by the Company’s Executive Chairman and Chairman of the Board, Kevin A. Shields, as of September 30, 2020. The remaining approximately 1.6% OP Units are owned by unaffiliated third parties. The Current Operating Partnership may conduct certain activities through one or more of the Company’s taxable REIT subsidiaries, which are wholly-owned subsidiaries of the Current Operating Partnership. 1. Organization (continued) As of September 30, 2020, the Company ha d issued 283,769,972 sh ares (approxim ately $2.8 billion) of common stock since November 9, 2009 in various private offerings, public offerings, DRP offerings and mergers (includes EA-1 offerings and EA-1 merger with Signature Office REIT, Inc. and the Mergers). Th ere were 229,775,115 shares of common stock outstanding as of September 30, 2020, including shares issued pursuant to the DRP, less shares redeemed pursuant to the share redemption program ("SRP") and self-tender offer. As of September 30, 2020 and December 31, 2019, the Company had issued approximately $310.8 million and $293.7 million in shares pursuant to the DRP, respectively . As of September 30, 2020, 151,178 shares subject to the Company's quarterly cap on aggregate redemptions were classified on the consolidated balance sheet as common stock subject to redemption. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | Basis of Presentation and Summary of Significant Accounting Policies There have been no significant changes to the Company’s accounting policies since the Company filed its audited financial statements in its Annual Report on Form 10-K for the year ended December 31, 2019. For further information about the Company’s accounting policies, refer to the Company’s consolidated financial statements and notes thereto for the year ended December 31, 2019 included in the Company’s Annual Report on Form 10-K filed with the SEC. The accompanying unaudited consolidated financial statements of the Company are prepared by management on the accrual basis of accounting and in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial information as contained in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”), and in conjunction with rules and regulations of the SEC. Certain information and footnote disclosures required for annual financial statements have been condensed or excluded pursuant to SEC rules and regulations. Accordingly, the unaudited consolidated financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. The unaudited consolidated financial statements include accounts and related adjustments, which are, in the opinion of management, of a normal recurring nature and necessary for a fair presentation of the Company’s financial position, results of operations and cash flows for the interim period. Operating results for the three and nine months ended September 30, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020. These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 . In addition, see the risk factors identified in Part II, Item 1A of this Form 10-Q and in the “Risk Factors” section of the Company's Annual Report on Form 10-K for the year ended December 31, 2019 and Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 . The consolidated financial statements of the Company include all accounts of the Company, the Current Operating Partnership, and its subsidiaries. Intercompany transactions are not shown on the consolidated statements. However, each property-owning entity is a wholly-owned subsidiary which is a special purpose entity ("SPE"), whose assets and credit are not available to satisfy the debts or obligations of any other entity, except to the extent required with respect to any co-borrower or guarantor under the same credit facility. Use of Estimates The preparation of the unaudited consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited consolidated financial statements and accompanying notes. Actual results could materially differ from those estimates. Per Share Data The Company reports earnings per share for the period as (1) basic earnings per share computed by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding during the period, and (2) diluted earnings per share computed by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding, including common stock equivalents. As of September 30, 2020 and December 31, 2019, there were no material common stock equivalents that would have a dilutive effect on earnings (loss) per share for common stockholders. 2. Basis of Presentation and Summary of Significant Accounting Policies (continued) During the quarter ended September 30, 2020, the Company retroactively adjusted the number of common shares outstanding in accordance with ASC 260-10, Earnings Per Share ("ASC 260-10"). ASC 260-10 requires the computations of basic and diluted earnings per share to be adjusted retroactively for all periods presented to reflect the change in capital structure if the number of common shares outstanding increases as a result of a stock dividend or stock split or decreases as a result of a reverse stock split. If changes in common stock resulting from stock dividends, stock splits, or reverse stock splits occur after the close of the period but before the consolidated financial statements are issued or are available to be issued, the per share computations for those and any prior period consolidated financial statements presented shall be based on the new number of shares. Segment Information ASC 280, Segment Reporting, establishes standards for reporting financial and descriptive information about a public entity’s reportable segments. The Company internally evaluates all of the properties and interests therein as one reportable segment. Goodwill Goodwill represents the excess of consideration paid over the fair value of underlying identifiable net assets of business acquired. The Company's goodwill has an indeterminate life and is not amortized, but is tested for impairment on an annual basis, or more frequently if events or changes in circumstances indicate that the asset might be impaired. The Company takes a qualitative approach to consider whether an impairment of goodwill exists prior to quantitatively determining the fair value of the reporting unit in step one of the impairment test. The Company performs its annual assessment on October 1st. Recently Issued Accounting Pronouncements Changes to GAAP are established by the FASB in the form of ASUs to the FASB’s Accounting Standards Codification. The Company considers the applicability and impact of all ASUs. Other than the ASUs discussed below, the FASB has not recently issued any other ASUs that the Company expects to be applicable and have a material impact on the Company's financial statements. Adoption of New Accounting Pronouncements During the first quarter of 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848). ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. During the first quarter of 2020, |
Real Estate
Real Estate | 9 Months Ended |
Sep. 30, 2020 | |
Real Estate [Abstract] | |
Real Estate | Real Estate As of September 30, 2020, the Company’s real estate portfolio consiste d of 99 properties in 25 states consi sting substantially of office, warehouse, and manufacturing facilities a nd one land pa rcel held for future development with a combined acquisition value of app roximately $4.2 billion, in cluding the allocation of the purchase price to above- and below-market lease valuation. Depreciation expense for buildings and improvements for the nine months ended September 30, 2020 was $70.0 million. Amortization expense for intangibles, including, but not limited to, tenant origination and absorption costs for the nine months ended September 30, 2020 was $51.0 million. 2020 Acquisition The purchase price and other acquisition items for the property acquired during the nine months ended September 30, 2020 are shown below: Property Location Tenant/Major Lessee Acquisition Date Purchase Price Square Feet Acquisition Fees and Expenses Year of Lease Expiration Pepsi Bottling Ventures North Carolina PepsiCo 2/5/2020 $34,937 526,320 $386 2032 Real Estate - Valuation and Purchase Price Allocation The Company allocates the purchase price to the relative fair value of the tangible assets of a property by valuing the property as if it were vacant. This “as-if vacant” value is estimated using an income, or discounted cash flow, approach that relies upon Level 3 inputs, which are unobservable inputs based on the Company's review of the assumptions a market participant would use. These Level 3 inputs include discount rates, capitalization rates, market rents and comparable sales data for similar properties. Estimates of future cash flows are based on a number of factors including historical operating results, known and anticipated trends, and market and economic conditions. In calculating the “as-if vacant” value for the acquisition completed during the nine months ended September 30, 2020, the Company used a discount rate of 6.25%. In determining the fair value of intangible lease assets or liabilities, the Company also considers Level 3 inputs. Acquired above and below-market leases are valued based on the present value of the difference between prevailing market rates and the in-place rates measured over a period equal to the remaining term of the lease for above-market leases and the initial term plus the term of any below-market fixed rate renewal options for below-market leases, if applicable. The estimated fair value of acquired in-place at-market tenant leases are the costs that would have been incurred to lease the property to the occupancy level of the property at the date of acquisition. Such estimates include the value associated with leasing commissions, legal and other costs, as well as the estimated period necessary to lease such property that would be incurred to lease the property to its occupancy level at the time of its acquisition. Acquisition costs associated with asset acquisitions are capitalized during the period they are incurred. The following table summarizes the purchase price allocation of the property acquired during the nine months ended September 30, 2020: Property Land Building Improvements Tenant origination and absorption costs In-place lease valuation - (below) / market Debt discount / (premium) Total (1) Pepsi Bottling Ventures $3,407 $26,813 $954 $4,970 $(712) $(109) $35,323 (1) The allocations noted above are based on a determination of the relative fair value of the total consideration provided and represent the amount paid including capitalized acquisition costs. Intangibles The Company allocated a portion of the acquired and contributed real estate asset value to in-place lease valuation, tenant origination and absorption cost, and other intangibles, net of the write-off of intangibles, as of September 30, 2020 and December 31, 2019: 3. Real Estate (continued) September 30, 2020 December 31, 2019 In-place lease valuation (above market) $ 43,605 $ 44,012 In-place lease valuation (above market) - accumulated amortization (35,024) (33,322) In-place lease valuation (above market), net $ 8,581 $ 10,690 Ground leasehold interest (below market) 2,254 2,254 Ground leasehold interest (below market) - accumulated amortization (184) (164) Ground leasehold interest (below market), net 2,070 2,090 Intangible assets, net $ 10,651 $ 12,780 In-place lease valuation (below market) $ (68,334) $ (67,622) Land leasehold interest (above market) (3,073) (3,073) In-place lease valuation & land leasehold interest - accumulated amortization 42,859 38,890 Intangible liabilities, net $ (28,548) $ (31,805) Tenant origination and absorption cost $ 745,039 $ 744,773 Tenant origination and absorption cost - accumulated amortization (399,005) (354,379) Tenant origination and absorption cost, net $ 346,034 $ 390,394 The following table sets forth the estimated annual amortization (income) expense for in-place lease valuation, net, tenant origination and absorption costs, ground leasehold improvements, and other leasing costs as of September 30, 2020 for the next five years: Year In-place lease valuation, net Tenant origination and absorption costs Ground leasehold interest Other leasing costs Remaining 2020 $ (525) $ 14,870 $ (73) $ 1,372 2021 $ (2,118) $ 57,846 $ (290) $ 6,057 2022 $ (2,518) $ 54,744 $ (290) $ 6,063 2023 $ (2,465) $ 50,184 $ (290) $ 5,934 2024 $ (1,648) $ 38,006 $ (291) $ 5,700 2025 $ (1,186) $ 27,450 $ (290) $ 5,580 Sale of Property On June 30, 2020, the Company sold the Bank of America II property located at 1800 Tapo Canyon in Simi Valley, California for total proceeds of $24.5 million, less closing costs and other closing credits. The carrying value of the property on the closing date was approximately $19.6 million. Upon the sale of the property, the Company recognized a gain of approximately $4.3 million. Impairments 2200 Channahon Road, Houston Westway I and 2275 Cabot Drive During the nine months ended September 30, 2020, the Company recorded an impairment provision of approximately $22.2 million as it was determined that the carrying value of the real estate would not be recoverable on three properties. This impairment resulted from changes in longer absorption periods, lower market rents and shorter anticipated hold periods. In determining the fair value of property, the Company considered Level 3 inputs. See Note 8, Fair Value Measurements , for details. 3. Real Estate (continued) Restricted Cash In conjunction with the acquisition of certain assets, as required by certain lease provisions or certain lenders in conjunction with an acquisition or debt financing, or credits received by the seller of certain assets, the Company assumed or funded reserves for specific property improvements and deferred maintenance, re-leasing costs, and taxes and insurance, which are included on the consolidated balance sheets as restricted cash. Additionally, an ongoing replacement reserve is funded by certain tenants pursuant to each tenant’s respective lease as follows: Balance as of September 30, 2020 December 31, 2019 Cash reserves $ 22,909 $ 48,129 Restricted lockbox 12,922 10,301 Total $ 35,831 $ 58,430 |
Investments in Unconsolidated E
Investments in Unconsolidated Entities | 9 Months Ended |
Sep. 30, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investments in Unconsolidated Entities | Investments in Unconsolidated Entities Heritage Commons X, LTD In June 2018, the Company, through an SPE, wholly owned by the Current Operating Partnership, formed a joint venture (the "Heritage Commons X") for the construction and ownership of a four-story, Class "A" office building with a net rentable area of approximately 200,000 square feet located in Fort Worth, Texas (the "Heritage Commons Property"). The Heritage Commons Property was completed in April 2019 and is 100% leased to Mercedes-Benz Financial Services USA. On July 17, 2019, Heritage Commons X sold the Heritage Commons Property. Digital Realty Trust, Inc. In September 2014, the Company, through an SPE, wholly owned by the Current Operating Partnership, acquired an 80% interest in a joint venture with an affiliate of Digital Realty Trust, Inc. ("Digital") for $68.4 million, which was funded with equity proceeds raised in the Company's public offerings. The gross acquisition value of the property was $187.5 million, plus closing costs, which was partially financed with debt of $102.0 million. The joint venture was created for purposes of directly or indirectly acquiring, owning, financing, operating and maintaining a data center facility located in Ashburn, Virginia (the "Property"). The Property is approximately 132,300 square feet and consists of certain data processing and communications equipment that is fully leased to a social media company and a financial services company with an average remaining lease term of approximat ely 3.5 years. The interests discussed above are deemed to be variable interests in variable interest entities ("VIE") and based on an evaluation of the variable interests against the criteria for consolidation, the Company determined that it is not the primary beneficiary of the investments, as the Company does not have power to direct the activities of the entities that most significantly affect their performance. As such, the interest in the VIEs is recorded using the equity method of accounting in the accompanying consolidated financial statements. Under the equity method, the investments in the unconsolidated entities are stated at cost and adjusted for the Company’s share of net earnings or losses and reduced by distributions. Equity in earnings of real estate ventures is generally recognized based on the allocation of cash distributions upon liquidation of the investment at book value in accordance with the operating agreements. The Company's maximum exposure to losses associated with its unconsolidated investments is primarily limited to its carrying value in the investments. In September 2014, the joint venture entered into a secured term loan (the "Loan") in the amount of approximately $102.0 million. The Loan had an original maturity date of September 9, 2019 and included two extension options of 12 additional months each beyond the original maturity date. On March 29, 2019, the joint venture executed the first 12-month loan extension. Based on the executed extension, the new loan maturity date was September 9, 2020. The extension did not change the loan amount, rate or other substantive terms. The Company had approximately $8.2 million in an outstanding letter of credit. 4. Investments in Unconsolidated Entities (continued) Since the joint venture could not execute a long term extension with the current tenant or sign a new lease, discussions with the lender did not result in a loan additional extension in 2020. As a result, on September 9, 2020, the lender provided a notice of default for non-payment of the unpaid balance of the Loan and exercised its right to draw on the stand-by letter of credit. The Company funded the $8.2 million stand-by letter of credit with cash. In accordance with the terms of the Digital operating agreement, the Company holds a guaranteed minimum return such that the Digital managing member will pay an amount to the Company in order for the Company to receive a minimum 7% return on investment, subject to a cap on actual cash amounts distributed to the managing member. As part of the wind up of the joint venture, the Company has recorded a receivable from the Digital managing member of $4.1 million that it expects to receive in first quarter of 2021 and has written off its remaining investment in the venture. The Company is not exposed to any future funding obligations and there are no other future losses expected to arise from this investment. As of September 30, 2020, the balance of the investments are shown below: Digital Realty Heritage Total Balance as of December 31, 2019 $ 10,584 $ 444 $ 11,028 Net loss (165) — (165) Distributions (8,120) (410) (8,530) Contributions 8,160 — 8,160 Valuation adjustment (1) (4,452) — (4,452) Impairment (1,907) — (1,907) Clawback receivable reclass (2) (4,100) — (4,100) Balance as of September 30, 2020 $ — $ 34 $ 34 (1) Amount represents a charge to arrive at the net realizable value as of September 30, 2020, which is included in the line item "(Loss) Gain from investment in unconsolidated entities" in the consolidated statement of operations. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Debt | Debt As of September 30, 2020 and December 31, 2019, the Company’s debt consisted of the following: September 30, 2020 December 31, 2019 Contractual Interest Rate (1) Loan Effective Interest Rate (2) HealthSpring Mortgage Loan $ 20,340 $ 20,723 4.18% April 2023 4.62% Midland Mortgage Loan 98,687 100,249 3.94% April 2023 4.12% Emporia Partners Mortgage Loan 1,749 2,104 5.88% September 2023 5.97% Samsonite Loan 20,418 21,154 6.08% September 2023 5.10% Highway 94 Loan 14,922 15,610 3.75% August 2024 4.78% Pepsi Bottling Ventures Loan 18,677 — 3.69% October 2024 3.92% AIG Loan II 126,970 126,970 4.15% November 2025 4.93% BOA Loan 375,000 375,000 3.77% October 2027 3.91% BOA/KeyBank Loan 250,000 250,000 4.32% May 2028 4.14% AIG Loan 104,352 105,762 4.96% February 2029 5.08% Total Mortgage Debt 1,031,115 1,017,572 Revolving Credit Facility (3) 401,500 211,500 LIBO Rate + 1.60% June 2023 1.88% 2023 Term Loan 200,000 200,000 LIBO Rate + 1.55% June 2023 1.80% 2024 Term Loan 400,000 400,000 LIBO Rate + 1.55% April 2024 1.79% 2026 Term Loan 150,000 150,000 LIBO Rate + 1.85% April 2026 2.06% Total Debt 2,182,615 1,979,072 Unamortized Deferred Financing Costs and Discounts, net (8,263) (9,968) Total Debt, net $ 2,174,352 $ 1,969,104 (1) Including the effect of the interest rate swap agreements with a total notional amount of $750.0 million, the weighted average interest rate as of September 30, 2020 was 3.56% for both the Company’s fixed-rate and variable-rate debt combined and 3.96% for the Company’s fixed-rate debt only. (2) Reflects the effective interest rate as of September 30, 2020 and includes the effect of amortization of discounts/premiums and deferred financing costs. (3) The LIBO rate as of September 1, 2020 (ef fe two one Second Amended and Restated Credit Agreement On April 30, 2019, the Company, through the Current Operating Partnership, entered into that certain second amended and restated credit agreement (the "Second Amended and Restated Credit Agreement") related to a revolving credit facility (the "Revolving Credit Facility") and three term loans described below (the "Term Loans" and collectively with the Revolving Credit Facility, the "KeyBank Loans") with a syndicate of lenders, under which KeyBank National Association ("KeyBank") serves as administrative agent. The KeyBank Loans have an interest rate calculated based on London Interbank Offered Rate (LIBOR) plus the applicable LIBOR margin, as provided in the Second Amended and Restated Credit Agreement, or the Base Rate plus the applicable base rate margin, as provided in the agreement. The applicable LIBOR margin and base rate margin are dependent on the consolidated leverage ratio of the Current Operating Partnership, the Company, and the Company's subsidiaries, as disclosed in the periodic compliance certificate provided to our administrative agent each quarter. If the Current Operating Partnership obtains an investment grade rating of its senior unsecured long term debt from Standard & Poor's Rating Services, Moody's Investors Service, Inc., or Fitch, Inc., the applicable LIBOR margin and base rate margin will be dependent on such rating. The Second Amended and Restated Credit Agreement relating to the Revolving Credit Facility provides that the Current Operating Partnership must maintain a pool of unencumbered real properties (each a "Pool Property" and collectively the "Pool Properties") that meet certain requirements contained in the Second Amended and Restated Credit Agreement. The agreement sets forth certain covenants relating to the Pool Properties, including, without limitation, the following: • there must be no less than 15 Pool Properties at any time; • no greater than 15% of the aggregate pool value may be contributed by a single Pool Property or tenant; 5. Debt (continued) • no greater than 15% of the aggregate pool value may be contributed by Pool Properties subject to ground leases; • no greater than 20% of the aggregate pool value may be contributed by Pool Properties which are under development or assets under renovation; • the minimum aggregate leasing percentage of all Pool Properties must be no less than 90%; and • other limitations as determined by KeyBank upon further due diligence of the Pool Properties. Borrowing availability under the Second Amended and Restated Credit Agreement is limited to the lesser of (i) an unsecured leverage ratio of no greater than 60%, or (ii) an unsecured interest coverage ratio of no less than 2.00:1.00. Guarantors of the KeyBank Loans include the Company, each special purpose entity that owns a Pool Property, and each of the Current Operating Partnership other subsidiaries which owns a direct or indirect equity interest in a special purpose entity that owns a Pool Property. In addition to customary representations, warranties, covenants, and indemnities, the KeyBank Loans require the Current Operating Partnership to comply with the following at all times, which will be tested on a quarterly basis: • a maximum consolidated leverage ratio of 60%, or, the ratio may increase to 65% for up to four consecutive quarters after a material acquisition; • a minimum consolidated tangible net worth of 75% of the Company's consolidated tangible net worth at closing of the Revolving Credit Facility, or approximately $2.0 billion, plus 75% of net future equity issuances (including OP Units in the Current Operating Partnership), minus 75% of the amount of any payments used to redeem the Company's stock or the OP Units in the Current Operating Partnership, minus any amounts paid for the redemption or retirement of or any accrued return on the preferred equity issued under the preferred equity investment made in EA-1 in August 2018 by SHBNPP Global Professional Investment Type Private Real Estate Trust No. 13 (H); • upon consummation, if ever, of an initial public offering, a minimum consolidated tangible net worth of 75% of the Company's consolidated tangible net worth plus 75% of net future equity issuances (including OP Units in the Current Operating Partnership) should the Company publicly list its shares; • a minimum consolidated fixed charge coverage ratio of not less than 1.50:1.00; • a maximum total secured debt ratio of not greater than 40%, which ratio will increase by five percentage points for four quarters after closing of a material acquisition that is financed with secured debt; • a minimum unsecured interest coverage ratio of 2.00:1.00; • a maximum total secured recourse debt ratio, excluding recourse obligations associated with interest rate hedges, of 10% of our total asset value; • aggregate maximum unhedged variable rate debt of not greater than 30% of the Company's total asset value; and • a maximum payout ratio of not greater than 95% commencing for the quarter ended September 30, 2019. Furthermore, the activities of the Current Operating Partnership, the Company, and the Company's subsidiaries must be focused principally on the acquisition, operation, and maintenance of income-producing office and industrial real estate properties. The Second Amended and Restated Credit Agreement contains certain restrictions with respect to the investment activities of the Current Operating Partnership, including, without limitation, the following: (i) unimproved land may not exceed 5% of total asset value; (ii) developments that are pre-leased assets under development may not exceed 20% of total asset value; (iii) investments in unconsolidated affiliates may not exceed 10% of total asset value; (iv) investments in mortgage notes receivable may not exceed 15% of total asset value; and (v) leased assets under renovation may not exceed 10% of total asset value. These investment limitations cannot exceed 25% in the aggregate, based on total asset value, as defined in the Second Amended and Restated Credit Agreement. See Note 15, Subsequent Events , for amendments to the Company's Second Amended and Restated Credit Agreement. 5. Debt (continued) Pepsi Bottling Ventures Mortgage Loan On February 5, 2020, as part of the acquisition of the Pepsi Bottling Ventures ("PBV") property, the Company assumed a $18.9 million mortgage loan ("PBV Mortgage Loan") from State Farm Life Insurance Company, as participating holder of the note. The PBV Mortgage Loan matures on October 1, 2024, has a fixed interest rate of 3.69% , and requires monthly payments of principal and interest. The PBV Mortgage Loan is secured by a deed of trust on the PBV property. Debt Covenant Compliance Pursuant to the terms of the Company's mortgage loans and the KeyBank Loans, the Current Operating Partnership, in consolidation with the Company, is subject to certain loan compliance covenants. The Company was in compliance with all of its debt covenants as of September 30, 2020. |
Interest Rate Contracts
Interest Rate Contracts | 9 Months Ended |
Sep. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Interest Rate Contracts | Interest Rate Contracts Risk Management Objective of Using Derivatives The Company is exposed to certain risks arising from both business operations and economic conditions. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of debt funding and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the payment of future known and uncertain cash amounts, the values of which are determined by expected cash payments principally related to borrowings and interest rates. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. The Company does not use derivatives for trading or speculative purposes. Derivative Instruments On July 9, 2015, the Company executed one interest rate swap agreement to hedge the variable cash flows associated with LIBOR. The interest rate swap was effective for the period from July 9, 2015 to July 1, 2020 with a notional amount of $425.0 million, which matured during the third quarter of 2020. On August 31, 2018, the Company executed four interest rate swap agreements to hedge future variable cash flows associated with LIBOR. The forward-starting interest rate swaps with a total notional amount of $425.0 million became effective on July 1, 2020 and have a term of five years. On March 10, 2020, the Company entered into three interest rate swap agreements to hedge variable cash flows associated with LIBOR. The swap agreements became effective on March 10, 2020, and have a term of approximately five years with notional amounts of $150.0 million, $100.0 million and $75.0 million. The Company also has entered into interest rate swap agreements to hedge the variable cash flows associated with certain existing or forecasted LIBOR based variable-rate debt, including the Company's KeyBank Loans. The change in the fair value of derivatives designated and qualifying as cash flow hedges is initially recorded in accumulated other comprehensive income ("AOCI") and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. Amounts reported in AOCI related to derivatives will be reclassified to interest expense as interest payments are made on the Company's variable-rate debt. 6. Interest Rate Contracts (continued) The following table sets forth a summary of the interest rate swaps at September 30, 2020 and December 31, 2019: Fair Value (1) Current Notional Amounts Derivative Instrument Effective Date Maturity Date Interest Strike Rate September 30, 2020 December 31, 2019 September 30, 2020 December 31, 2019 Liabilities: Interest Rate Swap 3/10/2020 7/1/2025 0.83% $ (3,374) $ — $ 150,000 $ — Interest Rate Swap 3/10/2020 7/1/2025 0.84% (2,300) — 100,000 — Interest Rate Swap 3/10/2020 7/1/2025 0.86% (1,791) — 75,000 — Interest Rate Swap 7/1/2020 7/1/2025 2.82% (15,064) (7,038) 125,000 125,000 Interest Rate Swap 7/1/2020 7/1/2025 2.82% (12,074) (5,651) 100,000 100,000 Interest Rate Swap 7/1/2020 7/1/2025 2.83% (12,084) (5,665) 100,000 100,000 Interest Rate Swap 7/1/2020 7/1/2025 2.84% (12,165) (5,749) 100,000 100,000 Interest Rate Swap 7/9/2015 7/1/2020 1.69% — (43) — 425,000 Total $ (58,852) $ (24,146) $ 750,000 $ 850,000 (1) The Company records all derivative instruments on a gross basis in the consolidated balance sheets, and accordingly, there are no offsetting amounts that net assets against liabilities. As of September 30, 2020, derivatives in a liability position are included in the line item "Interest rate swap liability" in the consolidated balance sheets at fair value. The following table sets forth the impact of the interest rate swaps on the consolidated statements of operations for the periods presented: Nine Months Ended September 30, 2020 2019 Interest Rate Swap in Cash Flow Hedging Relationship: Amount recognized in AOCI on derivatives $ (39,716) $ (25,849) Amount of loss (gain) reclassified from AOCI into earnings under “Interest expense” $ 5,104 $ (2,231) Total interest expense presented in the consolidated statement of operations in which the effects of cash flow hedges are recorded $ 59,321 $ 53,642 During the twelve months subsequent to September 30, 2020, the Company estimates that an additio nal $13.8 million of its income will be recognized from AOCI into earnings. Certain agreements with the derivative counterparties contain a provision providing that if the Company defaults on any of its indebtedness, including a default where repayment of the indebtedness has not been accelerated by the lender within a specified time period, then the Company could also be declared in default on its derivative obligations. As of September 30, 2020 and December 31, 2019, the fair value of interest rate swaps that were in a net liability position, which excludes any adjustment for nonperformance risk related to these agreements, was approximately $58.9 million and $24.1 million, respectively. As of September 30, 2020 and December 31, 2019, the Company had not posted any collateral related to these agreements. |
Accrued Expenses and Other Liab
Accrued Expenses and Other Liabilities | 9 Months Ended |
Sep. 30, 2020 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other Liabilities | Accrued Expenses and Other Liabilities Accrued expenses and other liabilities consisted of the following as of September 30, 2020 and December 31, 2019: September 30, 2020 December 31, 2019 Accrued tenant improvements $ 26,891 $ 11,802 Real estate taxes payable 18,899 13,385 Prepaid tenant rent 17,429 20,510 Interest payable 10,011 12,264 Deferred compensation 8,687 9,209 Property operating expense payable 7,667 7,752 Accrued CIP 6,902 4,794 Other liabilities 21,771 16,673 Total $ 118,257 $ 96,389 |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | The Company is required to disclose fair value information about all financial instruments, whether or not recognized in the consolidated balance sheets, for which it is practicable to estimate fair value. The Company measures and discloses the estimated fair value of financial assets and liabilities utilizing a fair value hierarchy that distinguishes between data obtained from sources independent of the reporting entity and the reporting entity’s own assumptions about market participant assumptions. This hierarchy consists of three broad levels, as follows: (i) quoted prices in active markets for identical assets or liabilities, (ii) "significant other observable inputs," and (iii) "significant unobservable inputs." "Significant other observable inputs" can include quoted prices for similar assets or liabilities in active markets, as well as inputs that are observable for the asset or liability, such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals. "Significant unobservable inputs" are typically based on an entity’s own assumptions, since there is little, if any, related market activity. In instances in which the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level of input that is significant to the fair value measurement in its entirety. The Company's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. There were no transfers between the levels in the fair value hierarchy during the nine months ended September 30, 2020 and the year ended December 31, 2019. The following table sets forth the assets and liabilities that the Company measures at fair value on a recurring basis by level within the fair value hierarchy as of September 30, 2020 and December 31, 2019: Assets/(Liabilities) Total Fair Value Quoted Prices in Active Markets for Identical Assets and Liabilities Significant Other Observable Inputs Significant Unobservable Inputs September 30, 2020 Interest Rate Swap Liability $ (58,852) $ — $ (58,852) $ — Corporate Owned Life Insurance Asset $ 4,070 $ — $ 4,070 $ — Mutual Funds Asset $ 6,054 $ 6,054 $ — $ — Deferred Compensation Liability $ (8,687) $ — $ (8,687) $ — December 31, 2019 Interest Rate Swap Liability $ (24,146) $ — $ (24,146) $ — Earn-out Liability (due to affiliates) $ (2,919) $ — $ — $ (2,919) Corporate Owned Life Insurance Asset $ 2,134 $ — $ 2,134 $ — Mutual Funds Asset $ 6,983 $ 6,983 $ — $ — Deferred Compensation Liability $ (9,209) $ — $ (9,209) $ — Real Estate For the nine months ended September 30, 2020, the Company determined that three of the Company's properties were impaired based upon discounted cash flow analyses where the most significant inputs were the market rental rates, terminal capitalization rate and discount rate. The Company considered these inputs as Level 3 measurements within the fair value hierarchy. The following table is a summary of the quantitative information related to the non-recurring fair value measurement for the impairment of the Company's real estate properties as of September 30, 2020: Range of Inputs or Inputs Unobservable Inputs: 2200 Channahon Road Houston Westway I 2275 Cabot Drive Market rent per square foot $2.00 to $3.00 $15.00 to $17.00 $11.00 to $12.00 Terminal capitalization rate 9.75% 7.75% 9.00% Discount rate 14.00% 9.00% 10.25% 8. Fair Value Measurements (continued) Financial Instruments Disclosed at Fair Value Financial instruments as of September 30, 2020 and December 31, 2019 consisted of cash and cash equivalents, restricted cash, accounts receivable, accrued expenses and other liabilities, and mortgage payable and other borrowings, as defined in Note 5, Debt . With the exception of the mortgage loans in the table below, the amounts of the financial instruments presented in the consolidated financial statements substantially approximate their fair value as of September 30, 2020 and December 31, 2019. The fair value o f the ten mor tgage loa ns in the table below is estimated by discounting each loan’s principal balance over the remaining term of the mortgage using current borrowing rates available to the Company for debt instruments with similar terms and maturities. The Company determined that the mortgage debt valuation in its entirety is classified in Level 2 of the fair value hierarchy, as the fair value is based on current pricing for debt with similar terms as the in-place debt. September 30, 2020 December 31, 2019 Fair Value Carrying Value (1) Fair Value Carrying Value (1) BOA Loan $ 357,417 $ 375,000 $ 369,343 $ 375,000 BOA/KeyBank Loan $ 263,840 $ 250,000 $ 264,101 $ 250,000 AIG Loan II $ 120,651 $ 126,970 $ 122,258 $ 126,970 AIG Loan $ 103,110 $ 104,352 $ 101,663 $ 105,762 Midland Mortgage Loan $ 98,077 $ 98,687 $ 99,318 $ 100,249 Samsonite Loan $ 21,418 $ 20,418 $ 22,103 $ 21,154 HealthSpring Mortgage Loan $ 20,621 $ 20,340 $ 20,868 $ 20,723 Pepsi Bottling Ventures Loan $ 19,054 $ 18,677 $ — $ — Highway 94 Loan $ 14,663 $ 14,922 $ 15,101 $ 15,610 Emporia Partners Mortgage Loan $ 1,780 $ 1,749 $ 2,105 $ 2,104 (1) The carrying values do not include the debt premium/(discount) or deferred financing costs as of September 30, 2020 and December 31, 2019. See Note 5, Debt |
Equity
Equity | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Equity | Equity Classes Class T shares, Class S shares, Class D shares, Class I shares, Class A shares, Class AA shares, Class AAA shares and Class E shares vote together as a single class, and each share is entitled to one vote on each matter submitted to a vote at a meeting of the Company's stockholders; provided that with respect to any matter that would only have a material adverse effect on the rights of a particular class of common stock, only the holders of such affected class are entitled to vote. As of September 30, 2020, there were 555,730 shares of Class T common stock, 1,800 shares of Class S common stock, 40,791 shares of Class D common stock, 1,894,561 shares of Class I common stock, 24,227,432 shares of Class A common stock, 47,184,766 shares of Class AA common stock, 917,756 shares of Class AAA common stock, and 154,952,279 shares of Class E common stock outstanding. Common Equity As of September 30, 2020, the Company had received aggregate gross offering proceeds of approximately $2.8 billion from the sale of shares in the private offering, the public offerings, and the DRP offerings, as discussed in Note 1, Organization . The Company also issued approximately 43,772,611 shares of its common stock upon the consummation of the merger of Signature Office REIT, Inc. in June 2015 and 174,981,547 Class E shares (in exchange for all outstanding shares of EA-1's common stock at the time of the Mergers) in April 2019 upon the consummation of the Mergers. As of September 30, 2020, there w ere 229,775,115 shares outstanding, including shares issued pursuant to the DRP, less shares redeemed pursuant to the SRP and the self-tender offer, which occurred in May 2019. Termination of Follow-On Offering On February 26, 2020, the Company’s Board approved the temporary suspension of the primary portion of the Company’s Follow-On Offering, effective February 27, 2020. The Follow-On Offering terminated with the expiration of the registration statement on Form S-11 (Registration No. 333-217223), as amended (the "Registration Statement"), on September 20, 2020. 9 . Equity (continued) Amendment and Reinstatement of DRP and Partial Reinstatement of SRP On July 16, 2020, the Board approved the (i) reinstatement of the DRP, effective July 27, 2020; (ii) amendment of the DRP to allow for the use of the most recently published NAV per share of the applicable share class available at the time of reinvestment as the DRP purchase price for each share class; and (iii) partial reinstatement of the SRP, effective August 17, 2020, subject to the following limitations: (A) redemptions will be limited to those sought upon a stockholder's death, qualifying disability, or determination of incompetence or incapacitation in accordance with the terms of the SRP, and (B) the quarterly cap on aggregate redemptions will be equal to the aggregate NAV, as of the last business day of the previous quarter, of the shares issued pursuant to the DRP during such quarter. Settlements of share redemptions will be made within the first three business days of the following quarter. Redemption activity during the quarter is listed below. Distribution Reinvestment Plan (DRP) The Company has adopted the DRP, which allows stockholders to have dividends and other distributions otherwise distributable to them invested in additional shares of common stock. No sales commissions or dealer manager fees will be paid on shares sold through the DRP, but the DRP shares will be charged the applicable distribution fee payable with respect to all shares of the applicable class. The purchase price per share under the DRP is equal to the net asset value ("NAV") per share applicable to the class of shares purchased, calculated using the most recently published NAV available at the time of reinvestment. The Company may amend or terminate the DRP for any reason at any time upon 10 days' prior written notice to stockholders, which may be provided through the Company's filings with the SEC. As of September 30, 2020 and December 31, 2019, the Company had issued approximately $310.8 million and $293.7 million in shares pursuant to the DRP, respectively. Share Redemption Program (SRP) The Company has adopted the SRP that enables stockholders to sell their stock to the Company in limited circumstances. On August 8, 2019, the Company's Board amended and restated its SRP, effective as of September 12, 2019, in order to (i) clarify that only those stockholders who purchased their shares from us or received their shares from the Company (directly or indirectly) through one or more non-cash transactions (including transfers to trusts, family members, etc.) may participate in the SRP; (ii) allocate capacity within each class of common stock such that the Company may redeem up to 5% of t he aggregate NAV of each class of common stock; (iii) treat all unsatisfied redemption requests (or portion thereof) as a request for redemption the following quarter unless otherwise withdrawn; and (iv) make certain other clarifying changes. On November 7, 2019, Board amended and restated the SRP, effective as of December 12, 2019, in order to (i) provide for redemption sought upon a stockholder’s determination of incompetence or incapacitation; (ii) clarify the circumstances under which a determination of incompetence or incapacitation will entitle a stockholder to such redemption; and (iii) make certain other clarifying changes. Under the SRP, the Company will redeem shares as of the last business day of each quarter. The redemption price will be equal to the NAV per share for the applicable class generally on the 13th day of the month prior to quarter end (which will be the most recently published NAV). Redemption requests must be received by 4:00 p.m. (Eastern time) on the second to last business day of the applicable quarter. Redemption requests exceeding the quarterly cap will be filled on a pro rata basis. With respect to any pro rata treatment, redemption requests following the death or qualifying disability of a stockholder will be considered first, as a group, followed by requests where pro rata redemption would result in a stockholder owning less than the minimum balance of $2,500 of shares of the Company's common stock, which will be redeemed in full to the extent there are available funds, with any remaining available funds allocated pro rata among all other redemption requests. All unsatisfied redemption requests must be resubmitted after the start of the next quarter, or upon the recommencement of the SRP, as applicable. There are several restrictions under the SRP. Stockholders generally have to hold their shares for one year before submitting their shares for redemption under the program; however, the Company will waive the one-year holding period in the event of the death or qualifying disability of a stockholder. Shares issued pursuant to the DRP are not subject to the one-year holding period. In addition, the SRP generally imposes a quarterly cap on aggregate redemptions of the Company's shares equal to a value of up to 5% of the aggregate NAV of the outstanding shares as of the last business day of the previous quarter, subject to the further limitations as indicated in the August 8, 2019 amendments discussed above. 9 . Equity (continued) As the value on the aggregate redemptions of the Company's shares is outside the Company's control, the 5% quarterly cap is considered to be temporary equity and is presented as the common stock subject to redemption on the accompanying consolidated balance sheets. The following table summarizes share redemption (excluding the self-tender offer) activity during the three and nine months ended September 30, 2020 and 2019: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Shares of common stock redeemed 693,199 10,589,361 1,241,812 10,589,361 Weighted average price per share $ 8.86 $ 9.54 $ 9.07 $ 9.54 Since July 31, 2014 and through September 30, 2020, the Company had redee med 25,472,376 sh ares (excluding the self-tender offer) of common stock for approximately $240.0 million at a weighted av erage price per share o f $9.42 p ursuant to the SRP. Since July 31, 2014 and through December 31, 2019, the Company had honored all outstanding redemption requests. During the three months ended September 30, 2019, redemption requests for Class E shares exceeded the quarterly 5% per share class limitation by 2,872,488 shares or approximately $27.4 million. The Class E shares not redeemed during that quarter, or 25% of the shares submitted, were treated as redemption requests for the quarter ended December 31, 2019. A ll outstanding requests for the quarter ended September 30, 2019 and all new requests for the quarter ended December 31, 2019 were honored on January 2, 2020. Redemptions sought upon a stockholder's death, qualifying disability, or determination of incompetence or incapacitation in the first quarter of 2020 were honored in accordance with the terms of the SRP, and the SRP officially was suspended as of March 28, 2020 for regular redemptions and subsequent redemptions for death, qualifying disability, or determination of incompetence or incapacitation after those honored in the first quarter of 2020 . During the three months ended September 30, 2020, the Company received redemption requests (including those due to death, disability or incapacitation) for 693,199 shares of common stock that were all redeemed during and subsequent to the current quarter. Issuance of Restricted Stock Units to Executive Officers and Employees On January 15, 2020, the Company issued 589,248 RSUs to Company employees, including officers, under the Griffin Capital Essential Asset REIT, Inc. Employee and Director Long-Term Incentive Plan (as amended, the "LTIP"). Each RSU represents a contingent right to receive one share of the Company’s Class E common stock when settled in accordance with the terms of the respective Restricted Stock Unit Award Agreement and will vest in equal, 25% installments on each of December 31, 2020, 2021, 2022, and 2023 provided that the employee continues to be employed by the Company on each such date, subject to certain accelerated vesting provisions as provided in the respective Restricted Stock Unit Award Agreement. The fair value of grants issued was approximately $5.5 million |
Noncontrolling Interests
Noncontrolling Interests | 9 Months Ended |
Sep. 30, 2020 | |
Noncontrolling Interest [Abstract] | |
Noncontrolling Interests | Noncontrolling Interests Noncontrolling interests represent limited partnership interests in the Current Operating Partnership in which the Company is the general partner. General partnership units and limited partnership units of the Current Operating Partnership were issued as part of the initial capitalization of the EA-1 Operating Partnership and GCEAR II Operating Partnership, in conjunction with members of management's contribution of certain assets, other contributions, and in connection with the Self-Administration Transaction as discussed in Note 1, Organization . As of September 30, 2020, noncontrolling interests were approximately 12.20% of total shares and 12.01% of weighted average shares outstanding (both measures assuming OP Units were converted to common stock). The Company has evaluated the terms of the limited partnership interests in the Current Operating Partnership, and as a result, has classified limited partnership interests issued in the initial capitalization, in conjunction with the contributed assets and in connection with the Self-Administration Transaction, as noncontrolling interests, which are presented as a component of permanent equity, except as discussed below. The Company evaluates individual noncontrolling interests for the ability to recognize the noncontrolling interest as permanent equity on the consolidated balance sheets at the time such interests are issued and on a continual basis. Any 10. Noncontrolling Interests (continued) noncontrolling interest that fails to qualify as permanent equity has been reclassified as temporary equity and adjusted to the greater of (a) the carrying amount or (b) its redemption value as of the end of the period in which the determination is made. As of September 30, 2020, the limited partners of the Current Operating Partnership owned approximately 31.8 million OP Units, which were issued to affiliated parties and unaffiliated third parties in exchange for certain properties, and in connection with the Self-Administration Transaction and other services. Approximatel y 20.4 million O P Units issued to affiliates ha ve a mandatory hold period until December 2020 and have no voting rights until the units are converted to common shares. In addition, 0.2 million OP Units were issued to unaffiliated third parties unrelated to property contributions. To the extent the contributors should elect to redeem all or a portion of their Current Operating Partnership units, pursuant to th e terms of the respective contribution agreement, such redemption shall be at a per unit value equivalent to the price at which the contributor acquired its OP Units in the respective transaction. The limited partners of the Current Operating Partnership, other than those related to the Will Partners REIT, LLC ("Will Partners" property) contribution, will have the right to cause the general partner of the Current Operating Partnership, the Company, to redeem their OP Units for cash equal to the value of an equivalent number of shares, or, at the Company’s option, purchase their OP Units by issuing one share of the Company’s common stock for the original redemption value of each limited partnership unit redeemed. The Company has the control and ability to settle such requests in shares. These rights may not be exercised under certain circumstances which could cause the Company to lose its REIT election. There were 134,383 OP Unit s redeemed during the nine months ended September 30, 2020 and 6,000 units redeemed during the year ended December 31, 2019 . The following summarizes the activity for noncontrolling interests recorded as equity for the nine months ended September 30, 2020 and year ended December 31, 2019: Nine Months Ended September 30, 2020 Year Ended December 31, 2019 Beginning balance $ 245,040 $ 232,203 Contributions/issuance of noncontrolling interests — 30,039 Reclass of noncontrolling interest subject to redemption 263 — Repurchase of noncontrolling interest (1,137) — Issuance of stock dividend for noncontrolling interest 1,068 1,861 Distributions to noncontrolling interests (10,556) (19,716) Allocated distributions to noncontrolling interests subject to redemption (23) (42) Net (loss) income (598) 3,749 Other comprehensive loss (4,165) (3,054) Ending balance $ 229,892 $ 245,040 Noncontrolling interests subject to redemption Operating partnership units issued pursuant to the Will Partners property contribution are not included in permanent equity on the consolidated balance sheets. The partners holding these units can cause the general partner to redeem the units for the cash value, as defined in the Current Operating Partnership agreement. As the general partner does not control these redemptions, these units are presented on the consolidated balance sheets as noncontrolling interest subject to redemption at their redeemable value. The net income (loss) and distributions attributed to these limited partners is allocated proportionately between common stockholders and other noncontrolling interests that are not considered redeemable. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Summarized below are the related party costs incurred by the Company for the nine months ended September 30, 2020 and 2019, respectively, and any related amounts receivable and payable as of September 30, 2020 and December 31, 2019: Incurred for the Nine Months Ended Receivable as of September 30, September 30, December 31, 2020 2019 2020 2019 Assets Assumed through the Self-Administration Transaction Cash to be received from an affiliate related to deferred compensation and other payroll costs $ — $ 658 $ — $ — Other fees 150 — 201 352 Due from GCC Reimbursable Expense Allocation 16 — 5 4 Payroll/Expense Allocation 300 321 781 481 Due from Affiliates Payroll/Expense Allocation — 1,217 — — O&O Costs (including payroll allocated to O&O) — 157 — — Other Fees — 6,375 — — Total $ 466 $ 8,728 $ 987 $ 837 Incurred for the Nine Months Ended Payable as of September 30, September 30, December 31, 2020 2019 2020 2019 Expensed Costs advanced by the advisor $ 1,546 $ 2,571 $ 1,120 $ 1,164 Consulting fee - shared services 1,875 1,874 631 441 Disposition fees — 641 — — Capitalized Leasing commissions — 596 — — Acquisition fees — 942 — — Assumed through Self- Administration Transaction/Mergers Earn-out — — 338 2,919 Stockholder Servicing Fee — 693 2,354 4,994 Other fees — 20 — — Other Distributions 8,353 10,089 712 1,365 Total $ 11,774 $ 17,426 $ 5,155 $ 10,883 Dealer Manager Agreement GCEAR entered into a dealer manager agreement and associated form of participating dealer agreement (the "Dealer Manager Agreement") with the dealer manager for the Follow-On Offering. The terms of the Dealer Manager Agreement are substantially similar to the terms of the dealer manager agreement from GCEAR's initial public offering ("IPO"), except as it relates to the share classes offered and the fees to be received by the dealer manager. The Follow-On Offering terminated on September 20, 2020. See Not 9, Equity. Distribution Fees Subject to the Financial Industry Regulatory Authority, Inc.'s limitations on underwriting compensation, under the Dealer Manager Agreement the Company will pay the dealer manager a distribution fee for ongoing services rendered to stockholders by participating broker-dealers or broker-dealers servicing investors’ accounts, referred to as servicing broker-dealers. The fee accrues daily, is paid monthly in arrears, and is calculated based on the average daily NAV for the applicable month (the “Average NAV”). 11. Related Party Transactions (continued) Conflicts of Interest Affiliated Dealer Manager Since Griffin Capital Securities, LLC, the Company's dealer manager, is an affiliate of the Company's former sponsor, the Company does not have the benefit of an independent due diligence review and investigation of the type normally performed by an unaffiliated, independent underwriter in connection with the offering of securities. The Company's dealer manager is also serving as the dealer manager for Griffin-American Healthcare REIT III, Inc. ("GAHR III") and Griffin-American Healthcare REIT IV, Inc. ("GAHR IV"), each of which are publicly-registered, non-traded REITs, as wholesale marketing agent for Griffin Institutional Access Real Estate Fund (“GIA Real Estate Fund”) and Griffin Institutional Access Credit Fund ("GIA Credit Fund") both of which are non-diversified, closed-end management investment companies that are operated as interval funds under the 1940 Act, and as dealer manager or master placement agent for various private offerings. Administrative Services Agreement In connection with the Mergers, the Company assumed, as the successor of EA-1 and the EA-1 Operating Partnership, an Administrative Services Agreement (the "Administrative Services Agreement"), pursuant to which GCC and GC LLC continue to provide office space and certain operational and administrative services at cost to the Company's Current Operating Partnership, Griffin Capital Essential Asset TRS, Inc., and GRECO, which may include, without limitation, the shared information technology, human resources, legal, due diligence, marketing, customer service, events, operations, accounting and administrative support services set forth in the Administrative Services Agreement. The Company pays GCC a monthly amount based on the actual costs anticipated to be incurred by GCC for the provision of such office space and services until the Company elects to provide such space and/or services for itself or through another provider, which amount is initially $187,167 per month, based on an approved budget. Such costs are reconciled quarterly and a full review of the costs will be performed at least annually. In addition, the Company will directly pay or reimburse GCC for the actual cost of any reasonable third-party expenses incurred in connection with the provision of such services. Certain Conflict Resolution Procedures Every transaction that the Company enters into with affiliates is subject to an inherent conflict of interest. The Board may encounter conflicts of interest in enforcing the Company's rights against any affiliate in the event of a default by or disagreement with an affiliate or in invoking powers, rights or options pursuant to any agreement between the Company and affiliates. See the Company's Code of Ethics available at the "Corporate Governance" subpage of the Company's website at www.GCEAR.com for a detailed description of the Company's conflict resolution procedures. |
Operating Leases
Operating Leases | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Operating Leases | Operating Leases Lessor The Company leases commercial and industrial space to tenants primarily under non-cancelable operating leases that generally contain provisions for minimum base rents plus reimbursement for certain operating expenses. Total minimum lease payments are recognized in rental income on a straight-line basis over the term of the related lease and estimated reimbursements from tenants for real estate taxes, insurance, common area maintenance and other recoverable operating expenses are recognized in rental income in the period that the expenses are incurred. The Company recogn ized $234.9 million and $212.8 million of lease income related to operating lease payments for the nine months ended September 30, 2020 and 2019, respectively. 12. Operating Leases (continued) The Company's current leases have expirations ranging from 2020 to 2044. The following table sets forth the undiscounted cash flows for future minimum base rents to be received under operating leases as of September 30, 2020: As of September 30, 2020 Remaining 2020 $ 72,450 2021 303,943 2022 305,905 2023 292,005 2024 251,481 Thereafter 1,137,808 Total $ 2,363,592 The future minimum base rents in the table above excludes tenant reimbursements of operating expenses, amortization of adjustments for deferred rent receivables and the amortization of above/below-market lease intangibles. Lessee As of September 30, 2020, the Company leased three parcels of land located in Arizona under long-term ground leases with expiration dates of September 2102, December 2095, and September 2102 with no options to renew. The Company leases office space as part of conducting day-to-day business in Chicago. The Company's office space lease has a remaining lease term of approximately five years and no option to renew. The Company incurred operating lease costs of approximatel y $0.9 million, a nd $0.7 million for the three months ended September 30, 2020 and 2019, respectively, which are included in "Property Operating Expense" in the accompanying consolidated statement of operations. Total cash paid for amounts included in the measurement of operating lease liabilities was $0.4 million and $0.3 million for three months ended September 30, 2020 and 2019, respectively. The Company incurred operating lease costs of approximately $2.8 million , and $1.9 million for the nine months ended September 30, 2020 and 2019, respectively, which are included in "Property Operating Expense" in the accompanying consolidated statement of operations. Total cash paid for amounts included in the measurement of operating lease liabilities wa s $1.2 million and $0.8 million for the nine months ended September 30, 2020 and 2019, respectively. The following table sets forth the weighted-average for the lease term and the discount rate as of September 30, 2020: Lease Term and Discount Rate As of September 30, 2020 Weighted-average remaining lease term in years. 80.3 Weighted-average discount rate (1) 4.98% (1) Because the rate implicit in each of the Company's leases was not readily determinable, the Company used an incremental borrowing rate. In determining the Company's incremental borrowing rate for each lease, the Company considered recent rates on secured borrowings, observable risk-free interest rates and credit spreads correlating to the Company's creditworthiness, the impact of collateralization and the term of each of the Company's lease agreements. Maturities of lease liabilities as of September 30, 2020 were as follows: As of September 30, 2020 Remaining 2020 $ 407 2021 1,632 2022 1,675 2023 1,741 2024 1,776 Thereafter 286,738 Total undiscounted lease payments 293,969 Less: imputed interest (248,483) Total lease liabilities $ 45,486 |
Operating Leases | Operating Leases Lessor The Company leases commercial and industrial space to tenants primarily under non-cancelable operating leases that generally contain provisions for minimum base rents plus reimbursement for certain operating expenses. Total minimum lease payments are recognized in rental income on a straight-line basis over the term of the related lease and estimated reimbursements from tenants for real estate taxes, insurance, common area maintenance and other recoverable operating expenses are recognized in rental income in the period that the expenses are incurred. The Company recogn ized $234.9 million and $212.8 million of lease income related to operating lease payments for the nine months ended September 30, 2020 and 2019, respectively. 12. Operating Leases (continued) The Company's current leases have expirations ranging from 2020 to 2044. The following table sets forth the undiscounted cash flows for future minimum base rents to be received under operating leases as of September 30, 2020: As of September 30, 2020 Remaining 2020 $ 72,450 2021 303,943 2022 305,905 2023 292,005 2024 251,481 Thereafter 1,137,808 Total $ 2,363,592 The future minimum base rents in the table above excludes tenant reimbursements of operating expenses, amortization of adjustments for deferred rent receivables and the amortization of above/below-market lease intangibles. Lessee As of September 30, 2020, the Company leased three parcels of land located in Arizona under long-term ground leases with expiration dates of September 2102, December 2095, and September 2102 with no options to renew. The Company leases office space as part of conducting day-to-day business in Chicago. The Company's office space lease has a remaining lease term of approximately five years and no option to renew. The Company incurred operating lease costs of approximatel y $0.9 million, a nd $0.7 million for the three months ended September 30, 2020 and 2019, respectively, which are included in "Property Operating Expense" in the accompanying consolidated statement of operations. Total cash paid for amounts included in the measurement of operating lease liabilities was $0.4 million and $0.3 million for three months ended September 30, 2020 and 2019, respectively. The Company incurred operating lease costs of approximately $2.8 million , and $1.9 million for the nine months ended September 30, 2020 and 2019, respectively, which are included in "Property Operating Expense" in the accompanying consolidated statement of operations. Total cash paid for amounts included in the measurement of operating lease liabilities wa s $1.2 million and $0.8 million for the nine months ended September 30, 2020 and 2019, respectively. The following table sets forth the weighted-average for the lease term and the discount rate as of September 30, 2020: Lease Term and Discount Rate As of September 30, 2020 Weighted-average remaining lease term in years. 80.3 Weighted-average discount rate (1) 4.98% (1) Because the rate implicit in each of the Company's leases was not readily determinable, the Company used an incremental borrowing rate. In determining the Company's incremental borrowing rate for each lease, the Company considered recent rates on secured borrowings, observable risk-free interest rates and credit spreads correlating to the Company's creditworthiness, the impact of collateralization and the term of each of the Company's lease agreements. Maturities of lease liabilities as of September 30, 2020 were as follows: As of September 30, 2020 Remaining 2020 $ 407 2021 1,632 2022 1,675 2023 1,741 2024 1,776 Thereafter 286,738 Total undiscounted lease payments 293,969 Less: imputed interest (248,483) Total lease liabilities $ 45,486 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation From time to time, the Company may become subject to legal proceedings, claims and litigation arising in the ordinary course of business. The Company is not a party to any material legal proceedings, nor is the Company aware of any pending or threatened litigation that would have a material adverse effect on the Company’s business, operating results, cash flows or financial condition should such litigation be resolved unfavorably. |
Declaration of Distributions
Declaration of Distributions | 9 Months Ended |
Sep. 30, 2020 | |
Declaration of Distributions [Abstract] | |
Declaration of Distributions | Declaration of DistributionOn March 30, 2020, the Board elected to change from a quarterly to a monthly declaration of distributions commencing in April 2020 in order to give the Board maximum flexibility due to the review of a prior potential strategic transaction and to monitor and evaluate the situation related to the financial impact of COVID-19 pandemic. As noted elsewhere, the Company is continuing to closely monitor the impact of the COVID-19 pandemic and believes it is prudent to continue to employ a more conservative cash management strategy due to the current environment. In light of these considerations, on June 15, 2020, July 28, 2020, August 25, 2020 and September 29, 2020, the Board declared cash distributions in the amount of $0.000956284 per day ($0.35 per share annualized), subject to adjustments for class-specific expenses, per Class E share, Class T share, Class S share, Class D share, Class I share, Class A share, Class AA share and Class AAA share of common stock, for stockholders of such classes as of the close of each business day of the period from July 1, 2020 through July 31, 2020, from August 1, 2020 through August 31, 2020, from September 1, 2020 through September 30, 2020, and October 1, 2020 through October 31, 2020, respectively. The Company paid such distributions to each stockholder of record on August 3, 2020, September 1, 2020, October 1, 2020, and November 2, 2020, respectively. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events First Amendment to the Second Amended and Restated Credit Agreement On October 1, 2020, the Company entered into the first amendment to the Second Amended and Restated Credit Agreement (the “First Amendment”) which eliminates the requirement to obtain approval of the majority lenders, as defined in the Second Amended and Restated Credit Agreement, to enter into any merger which will result in an increase in total asset value of the Company by 25% or more; allowing for greater flexibility in the acquisition of assets or portfolios of assets. Cash Distributions On October 19, 2020, the Board declared cash distributions for the month of November 2020 of $0.000956284 per day ($0.35 per share annualized), subject to adjustments for class-specific expenses, per Class E share, Class T share, Class S share, Class D share, Class I share, Class A share, Class AA share and Class AAA share of common stock, for stockholders of record at the close of each business day for the period commencing on November 1, 2020 and ending on November 30, 2020. The Company will pay such distributions to each stockholder of record at such time in December 2020 as determined by the Company’s Chief Executive Officer. Agreement and Plan of Merger with Cole Office & Industrial REIT (CCIT II), Inc. On October 29, 2020, the Company GRT (Cardinal REIT Merger Sub), LLC, a Maryland limited liability company and a wholly owned subsidiary of the Company ("Cardinal Merger Sub"), the Current Operating Partnership, GRT OP (Cardinal New GP Sub), LLC, a Delaware limited liability company and a wholly owned subsidiary of the Current Operating Partnership ("New GP Sub"), GRT OP (Cardinal LP Merger Sub), LLC, a Delaware limited liability company and a wholly owned subsidiary of the Current Operating Partnership ("LP Merger Sub"), GRT OP (Cardinal OP Merger Sub), LLC, a Delaware limited liability company and a subsidiary of LP Merger Sub and New GP Sub ("OP Merger Sub" and, together with the Company, Cardinal Merger Sub, the Current Operating Partnership, New GP Sub and LP Merger Sub, the "GCEAR Parties"), Cole Office & Industrial REIT (CCIT II), Inc., a Maryland corporation ("CCIT II"), Cole Corporate Income Operating Partnership II, LP, a Delaware limited partnership and a wholly owned subsidiary of CCIT II (the "CCIT II Operating Partnership"), and CRI CCIT II LLC, a Delaware limited liability company and a wholly owned subsidiary of CCIT II ("CCIT II LP" and, together with CCIT II and the CCIT II Operating Partnership, the "CCIT II Parties"), entered into an Agreement and Plan of Merger (the "CCIT II Merger Agreement"). The combined company (the "Combined Company") following the "CCIT II Mergers" (as such term is defined herein) will retain the name "Griffin Capital Essential Asset REIT, Inc." The Combined Company, as of October 29, 2020, would have a total asset value of approximately $5.8 billion, and would own 125 properties in 26 states, consisting of approximately 31 million square feet. On a pro forma basis, as of June 30, 2020, the Combined Company portfolio will be approximately 90% leased, on a weighted average basis, with a remaining weighted average lease term of 7.4 years, approximately 58% of the net rent will come from properties leased to tenants and/or guarantors who have, or whose non-guarantor parent companies have, investment grade or what management believes are generally equivalent ratings and no tenant will represent more than 3.3% of the 12-month forward net rents of the Combined Company, with the top ten tenants comprising, collectively, approximately 25% of the net rents of the Combined Company. Prior to entering into the CCIT II Merger Agreement, CCIT II (a) terminated the Agreement and Plan of Merger, dated as of August 30, 2020, by and among CCIT II, CIM Real Estate Finance Trust, Inc. (“CMFT”), and Thor II Merger Sub, LLC, a wholly owned subsidiary of CMFT (as amended, the "CMFT Merger Agreement"), in accordance with Section 9.1(c)(ii) of the CMFT Merger Agreement, and (b) paid to CMFT the termination fee equal to $7.38 million in accordance with the CMFT Merger Agreement, and will pay to CMFT the amount of CMFT’s Expenses (as defined in the CMFT Merger Agreement), up to $3.69 million, required to be paid pursuant to the terms of the CMFT Merger Agreement (such amounts together, the “CMFT Termination Payment”). Subject to the terms and conditions of the CCIT II Merger Agreement, at the Closing (as defined in the CCIT II Merger Agreement) (i) CCIT II will merge with and into Cardinal Merger Sub (the “REIT Merger”), with Cardinal Merger Sub being the surviving entity, (ii) OP Merger Sub will merge with and into CCIT II Operating Partnership (the “CCIT II Partnership Merger”), with the CCIT II Operating Partnership being the surviving entity and (iii) CCIT II LP will merge with and into LP Merger Sub (the “LP Merger” and, together with the REIT Merger and the CCIT II Partnership Merger, the “CCIT II Mergers”) with LP Merger Sub being the surviving entity. At the effective time of the CCIT II Partnership Merger and subject to the terms and conditions of the CCIT II Merger Agreement, each issued and outstanding share of CCIT II’s Class A common stock, $0.01 par value per share (“CCIT II Class A Common Stock”), and Class T common stock, $0.01 par value per share (“CCIT II Class T Common Stock” and together with the CCIT II Class A Common Stock, "CCIT II Common Stock"), will be converted into the right to receive 1.392 shares of the Company's Class E common stock, $0.001 par value per share ("Class E Common Stock"), subject to the treatment of fractional shares in accordance with the CCIT II Merger Agreement (the "REIT Merger Consideration"). At the effective time of the REIT Merger and subject to the terms and conditions of the CCIT II Merger Agreement, each issued and outstanding share of CCIT II Class A Common Stock granted under CCIT II’s 2018 Equity Incentive Plan, whether vested or unvested, will be cancelled in exchange for an amount equal to the REIT Merger Consideration. At the effective time of the CCIT II Partnership Merger and subject to the terms and conditions of the CCIT II Merger Agreement, (i) each issued and outstanding partnership unit of the CCIT II Operating Partnership (“CCIT II Operating Partnership Units”) held by CCIT II will be converted into the right to receive 1.392 shares of the Current Operating Partnership’s Class E units, subject to the treatment of fractional units in accordance with the CCIT II Merger Agreement, and CCIT II will be admitted as a limited partner of the Current Operating Partnership and (ii) each issued and outstanding CCIT II Operating Partnership Unit held by CCIT II LP will automatically be cancelled and cease to exist, and no consideration shall be paid, in connection with or as a consequence of the CCIT II Partnership Merger. At the effective time of the LP Merger and subject to the terms and conditions of the CCIT II Merger Agreement, all of the issued and outstanding limited liability company interests in CCIT II LP will automatically be cancelled and cease to exist, and no consideration shall be paid, in connection with or as a consequence of the LP Merger. For U.S. federal income tax purposes, it is intended that (i) the REIT Merger shall qualify as a “reorganization” under, and within the meaning of, Section 368(a) of the Internal Revenue Code of 1986, as amended (the "Code"), and the CCIT II Merger Agreement is intended to be adopted as a “plan of reorganization” for purposes of Sections 354 and 361 of the Code and (ii) the CCIT II Partnership Merger and the LP Merger together shall be treated as a contribution by CCIT II of all of its assets, subject to all of its liabilities, to the Current Operating Partnership in exchange for partnership interests of the Current Operating Partnership pursuant to Section 721 of the Code. The CCIT II Merger Agreement contains customary representations, warranties and covenants, including covenants relating to the conduct of the Company's and CCIT II's respective businesses during the period between the execution of the CCIT II Merger Agreement and the completion of the CCIT II Mergers, subject to certain exceptions. The CCIT II Merger Agreement also contains a representation and warranty on behalf of CCIT II that, prior to entering into the CCIT II Merger Agreement, CCIT II terminated the CMFT Merger Agreement (and paid CMFT the CMFT Termination Payment) and entered into the CCIT II Merger Agreement in compliance with the terms of the CMFT Merger Agreement. Pursuant to the terms of the CCIT II Merger Agreement, CCIT II and its subsidiaries and representatives may not solicit, provide information or enter into discussions concerning proposals relating to alternative business combination transactions, subject to certain limited exceptions set forth in the CCIT II Merger Agreement. The CCIT II Merger Agreement also provides that prior to the Stockholder Approval (as defined herein), CCIT II's board of directors may, under specified circumstances, make an Adverse Recommendation Change (as defined in the CCIT II Merger Agreement), including withdrawing its recommendation of the REIT Merger, subject to complying with certain conditions set forth in the CCIT II Merger Agreement. The CCIT II Merger Agreement may be terminated under certain circumstances, including but not limited to, by either the Company or CCIT II if the Mergers have not been consummated on or before 11:59 p.m. New York time on May 30, 2021 (the "Outside Date"), if a final and non-appealable order is entered permanently restraining or otherwise prohibiting the transactions contemplated by the CCIT II Merger Agreement, if the Stockholder Approval has not been obtained at the meeting of CCIT II’s stockholders to be called to consider the REIT Merger or upon a material uncured breach of the respective obligations, covenants or agreements by the other party that would cause the closing conditions in the CCIT II Merger Agreement not to be satisfied. In addition, CCIT II may terminate the CCIT II Merger Agreement in order to enter into an "Alternative Acquisition Agreement" with respect to a "Superior Proposal" (each as defined in the CCIT II Merger Agreement) at any time prior to receipt by CCIT II of the Stockholder Approval pursuant to and subject to the terms and conditions of the CCIT II Merger Agreement. The Company may terminate the CCIT II Merger Agreement, in certain limited circumstances, prior to the receipt of the Stockholder Approval, including upon (i) an Adverse Recommendation Change, (ii) a tender offer or exchange offer that is commenced which CCIT II's board of directors fails to recommend against or (iii) a breach by CCIT II, in any material respect, of its obligations under the no solicitation provisions set forth in the CCIT II Merger Agreement. If the CCIT II Merger Agreement is terminated because the CCIT II Mergers were not consummated before the Outside Date or because the Stockholder Approval was not obtained, and (i) an "Acquisition Proposal" (as defined in the CCIT II Merger Agreement) has been publicly announced or otherwise communicated to CCIT II's stockholders prior to the Stockholders Meeting (as defined in the CCIT II Merger Agreement), and (ii) within 12 months after the date of such termination (A) CCIT II consummates or enters into an agreement (that is thereafter consummated) in respect of an Acquisition Proposal for 50% or more of CCIT II’s equity or assets or (B) the board of directors of CCIT II recommends or fails to recommend against an Acquisition Proposal structured as a tender or exchange offer for 50% or more of CCIT II’s equity and such Acquisition Proposal is actually consummated, then CCIT II must pay the Company a termination fee of $18.45 million and up to $3.69 million as reimbursement for the Company's Expenses (as defined in the CCIT II Merger Agreement). If the CCIT II Merger Agreement is terminated in connection with CCIT II’s acceptance of a Superior Proposal or making an Adverse Recommendation Change, then CCIT II must pay to the Company a termination fee of $18.45 million and up to $3.69 million as reimbursement for the Company's Expenses. If the CCIT II Merger Agreement is terminated because any breach of any representation or warranty or failure to perform or comply with any obligation, covenant or agreement on the part of any of the CCIT II Parties set forth in the CCIT II Merger Agreement has occurred that would cause any of the closing conditions not to be satisfied, then CCIT II must pay to the Company up to $3.69 million as reimbursement for the Company’s Expenses. If the CCIT II Merger Agreement is terminated because any breach of any representation or warranty or failure to perform or comply with any obligation, covenant or agreement on the part of any of the GCEAR Parties set forth in the CCIT II Merger Agreement has occurred that would cause any of the closing conditions not to be satisfied, then the Company must pay to CCIT II (i) an amount equal to the CMFT Termination Payment and (ii) $3.69 million as reimbursement for CCIT II’s Expenses. The obligation of each party to consummate the CCIT II Mergers is subject to a number of customary conditions, including receipt of the approval of the REIT Merger (and of an amendment to CCIT II’s charter that is required to consummate the REIT Merger) by holders of a majority of the outstanding shares of the CCIT II Common Stock entitled to vote thereon (the “Stockholder Approval”), delivery of certain documents and legal opinions, the truth and correctness of the representations and warranties of the parties (subject to the materiality standards contained in the CCIT II Merger Agreement), the effectiveness of the registration statement on Form S-4 to be filed by the Company to register the shares of the Class E Common Stock to be issued as consideration in the REIT Merger, and the absence of a CCIT II Material Adverse Effect or GCEAR Material Adverse Effect (as each term is defined in the CCIT II Merger Agreement). The Company's obligation to consummate the CCIT II Mergers is not subject to a financing condition. Until the effective time of the REIT Merger, each of the Company and CCIT II are permitted to declare and pay distributions in an amount less than or equal to an annual rate of five percent of its net asset value as of June 30, 2020, ratably over the calendar year. The CCIT II Merger Agreement provides that the Company's board of directors will take such action as necessary to cause three (3) Independent Directors (as defined in the charters of each of CCIT II and the Company) serving as members of the board of directors of CCIT II to be elected to the Company's board of directors effective as of the effective time of the REIT Merger to serve until the next annual meeting of stockholders of the Company. In connection with such next annual meeting of stockholders of the Company, the Nominating and Corporate Governance Committee of the Company will recommend to the Company's board of directors at least one (1) of such CCIT directors for election to the Company's board of directors at such annual meeting of stockholders. The foregoing description of the CCIT II Merger Agreement is only a summary, does not purport to be complete and is qualified in its entirety by reference to the full text of the CCIT II Merger Agreement, which was filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the SEC on November 2, 2020. Termination Agreement Concurrently with the entry into the CCIT II Merger Agreement, the Company, CCIT II and Cole Corporate Income Management II, LLC (the “CCIT II Advisor”) entered into a letter agreement (the “Termination Agreement”). Pursuant to the Termination Agreement, the Advisory Agreement, dated as of August 27, 2013, by and between CCIT II and the CCIT II Advisor (as amended, the “CCIT II Advisory Agreement”) will be terminated upon consummation of the CCIT II Mergers. Pursuant to the Termination Agreement, (i) upon consummation of the CCIT II Mergers or (ii) termination of the CCIT II Advisory Agreement, if such termination occurs prior to the earlier of the consummation of the CCIT II Mergers and June 30, 2021, for certain reasons other than a material breach of the CCIT II Advisory Agreement by the CCIT II Advisor, CCIT II will pay the CCIT II Advisor the “Subordinated Performance Fee” (as defined in the CCIT II Advisory Agreement) in an amount equal to $26,688,591 and the “Disposition Fee” (as defined in the CCIT II Advisory Agreement) in an amount equal to $1.75 million. The Termination Agreement also provides that the CCIT II Advisor will not terminate the CCIT II Advisory Agreement with effect prior to the earlier of the consummation of the CCIT II Mergers and June 30, 2021, other than in the event of material breach of the CCIT II Advisory Agreement by CCIT II. In the event that the CCIT II Merger Agreement is terminated in accordance with its terms, the Termination Agreement will be automatically terminated. The foregoing description of the Termination Agreement is only a summary, does not purport to be complete and is qualified in its entirety by reference to the full text of the Termination Agreement, which was filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on November 2, 2020. DRP Offering As of November 4, 2020, the Company had issued 32,707,229 shares of the Company's common stock pursuant to the DRP offerings for approximately $315.8 million. COVID-19 Subsequent to September 30, 2020, the global and U.S. economies continue to be severely impacted by the COVID-19 pandemic. The consequences of the pandemic and its impact on the economy continue to evolve and the full extent of the impact is uncertain as of the date of this filing. The extent to which the COVID-19 pandemic impacts the Company’s results will depend on future developments that are highly uncertain and cannot be predicted, including new information that may emerge concerning the severity of COVID-19 pandemic and the actions taken to contain it or treat its impact. In recent months, the Company continues to take certain affirmative steps which the Company believes helps to position the Company in a manner that will assist the Company in withstanding the current uncertainty relating to the COVID-19 pandemic, including the following: • Proactively communicating with the Company's tenants and property managers to ensure lines of communication remain open related to operations and safety protocols prior to and related to decisions to return to work in accordance with various jurisdictional guidelines; • Monitoring the near-term solvency and liquidity of the Company's tenants and the extent to which the COVID-19 pandemic may impact their business; • Regularly communicating with KeyBank regarding availability under the Company's Revolving Credit Facility, which affords the Company with substantial current liquidity; • Continuing to closely monitor the Company's cash flow projections and actively updating its projections based upon current information, as well as testing for future contingencies; and • Continuing to evaluate a potential strategic transaction, as well as monitoring market opportunities that could enhance our long-term value and performance. The Company is currently working with certain tenants that have requested rent relief due to the impact of the COVID-19 pandemic to determine appropriate lease concessions. To date, two lease concessions have been granted. On April 10, 2020, the FASB issued a Staff Q&A to respond to some frequently asked questions about accounting for lease concessions related to the effects of the outbreak of COVID-19 pandemic. Consequently, for concessions related to the effects of the COVID-19 pandemic, an entity will not have to analyze each contract to determine whether enforceable rights and obligations for concessions exist in the contract and can elect to apply or not apply the lease modification guidance to those contracts. Entities may make the elections for any lessor-provided concessions related to the effects of the COVID-19 pandemic (e.g., deferrals of lease payments, cash payments made to the lessee, reduced future lease payments) as long as the concession does not result in a substantial increase in the rights of the lessor or the obligations of the lessee. The Company will continue to evaluate the impact of lease concessions and the appropriate accounting for those concessions. See “Item 1A. Risk Factors” within “Part II - Other Information” of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 for a discussion about risks that COVID-19 directly or indirectly may pose to the Company's business. |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Accounting | The accompanying unaudited consolidated financial statements of the Company are prepared by management on the accrual basis of accounting and in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial information as contained in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”), and in conjunction with rules and regulations of the SEC. Certain information and footnote disclosures required for annual financial statements have been condensed or excluded pursuant to SEC rules and regulations. Accordingly, the unaudited consolidated financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. |
Consolidation | The consolidated financial statements of the Company include all accounts of the Company, the Current Operating Partnership, and its subsidiaries. Intercompany transactions are not shown on the consolidated statements. However, each property-owning entity is a wholly-owned subsidiary which is a special purpose entity ("SPE"), whose assets and credit are not available to satisfy the debts or obligations of any other entity, except to the extent required with respect to any co-borrower or guarantor under the same credit facility. |
Use of Estimates | Use of Estimates The preparation of the unaudited consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited consolidated financial statements and accompanying notes. Actual results could materially differ from those estimates. |
Per Share Data | Per Share DataThe Company reports earnings per share for the period as (1) basic earnings per share computed by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding during the period, and (2) diluted earnings per share computed by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding, including common stock equivalents. |
Segment Information | Segment Information ASC 280, Segment Reporting, establishes standards for reporting financial and descriptive information about a public entity’s reportable segments. The Company internally evaluates all of the properties and interests therein as one reportable segment. |
Goodwill | GoodwillGoodwill represents the excess of consideration paid over the fair value of underlying identifiable net assets of business acquired. The Company's goodwill has an indeterminate life and is not amortized, but is tested for impairment on an annual basis, or more frequently if events or changes in circumstances indicate that the asset might be impaired. The Company takes a qualitative approach to consider whether an impairment of goodwill exists prior to quantitatively determining the fair value of the reporting unit in step one of the impairment test. The Company performs its annual assessment on October 1st. |
Recently Issued Accounting Pronouncements and Adoption of New Accounting Pronouncements | Recently Issued Accounting Pronouncements Changes to GAAP are established by the FASB in the form of ASUs to the FASB’s Accounting Standards Codification. The Company considers the applicability and impact of all ASUs. Other than the ASUs discussed below, the FASB has not recently issued any other ASUs that the Company expects to be applicable and have a material impact on the Company's financial statements. Adoption of New Accounting Pronouncements During the first quarter of 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848). ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. During the first quarter of 2020, |
Real Estate (Tables)
Real Estate (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Real Estate [Abstract] | |
Schedule of Property Acquisition | The purchase price and other acquisition items for the property acquired during the nine months ended September 30, 2020 are shown below: Property Location Tenant/Major Lessee Acquisition Date Purchase Price Square Feet Acquisition Fees and Expenses Year of Lease Expiration Pepsi Bottling Ventures North Carolina PepsiCo 2/5/2020 $34,937 526,320 $386 2032 |
Schedule of Asset Acquisition | The following table summarizes the purchase price allocation of the property acquired during the nine months ended September 30, 2020: Property Land Building Improvements Tenant origination and absorption costs In-place lease valuation - (below) / market Debt discount / (premium) Total (1) Pepsi Bottling Ventures $3,407 $26,813 $954 $4,970 $(712) $(109) $35,323 (1) The allocations noted above are based on a determination of the relative fair value of the total consideration provided and represent the amount paid including capitalized acquisition costs. |
Schedule of In-Place Lease Valuation and Tenant Origination and Absorption Cost | The Company allocated a portion of the acquired and contributed real estate asset value to in-place lease valuation, tenant origination and absorption cost, and other intangibles, net of the write-off of intangibles, as of September 30, 2020 and December 31, 2019: 3. Real Estate (continued) September 30, 2020 December 31, 2019 In-place lease valuation (above market) $ 43,605 $ 44,012 In-place lease valuation (above market) - accumulated amortization (35,024) (33,322) In-place lease valuation (above market), net $ 8,581 $ 10,690 Ground leasehold interest (below market) 2,254 2,254 Ground leasehold interest (below market) - accumulated amortization (184) (164) Ground leasehold interest (below market), net 2,070 2,090 Intangible assets, net $ 10,651 $ 12,780 In-place lease valuation (below market) $ (68,334) $ (67,622) Land leasehold interest (above market) (3,073) (3,073) In-place lease valuation & land leasehold interest - accumulated amortization 42,859 38,890 Intangible liabilities, net $ (28,548) $ (31,805) Tenant origination and absorption cost $ 745,039 $ 744,773 Tenant origination and absorption cost - accumulated amortization (399,005) (354,379) Tenant origination and absorption cost, net $ 346,034 $ 390,394 |
Schedule of Estimated Annual Amortization (Income) Expense | The following table sets forth the estimated annual amortization (income) expense for in-place lease valuation, net, tenant origination and absorption costs, ground leasehold improvements, and other leasing costs as of September 30, 2020 for the next five years: Year In-place lease valuation, net Tenant origination and absorption costs Ground leasehold interest Other leasing costs Remaining 2020 $ (525) $ 14,870 $ (73) $ 1,372 2021 $ (2,118) $ 57,846 $ (290) $ 6,057 2022 $ (2,518) $ 54,744 $ (290) $ 6,063 2023 $ (2,465) $ 50,184 $ (290) $ 5,934 2024 $ (1,648) $ 38,006 $ (291) $ 5,700 2025 $ (1,186) $ 27,450 $ (290) $ 5,580 |
Restrictions on Cash | Additionally, an ongoing replacement reserve is funded by certain tenants pursuant to each tenant’s respective lease as follows: Balance as of September 30, 2020 December 31, 2019 Cash reserves $ 22,909 $ 48,129 Restricted lockbox 12,922 10,301 Total $ 35,831 $ 58,430 |
Investments in Unconsolidated_2
Investments in Unconsolidated Entities (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of Investments | As of September 30, 2020, the balance of the investments are shown below: Digital Realty Heritage Total Balance as of December 31, 2019 $ 10,584 $ 444 $ 11,028 Net loss (165) — (165) Distributions (8,120) (410) (8,530) Contributions 8,160 — 8,160 Valuation adjustment (1) (4,452) — (4,452) Impairment (1,907) — (1,907) Clawback receivable reclass (2) (4,100) — (4,100) Balance as of September 30, 2020 $ — $ 34 $ 34 (1) Amount represents a charge to arrive at the net realizable value as of September 30, 2020, which is included in the line item "(Loss) Gain from investment in unconsolidated entities" in the consolidated statement of operations. |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | As of September 30, 2020 and December 31, 2019, the Company’s debt consisted of the following: September 30, 2020 December 31, 2019 Contractual Interest Rate (1) Loan Effective Interest Rate (2) HealthSpring Mortgage Loan $ 20,340 $ 20,723 4.18% April 2023 4.62% Midland Mortgage Loan 98,687 100,249 3.94% April 2023 4.12% Emporia Partners Mortgage Loan 1,749 2,104 5.88% September 2023 5.97% Samsonite Loan 20,418 21,154 6.08% September 2023 5.10% Highway 94 Loan 14,922 15,610 3.75% August 2024 4.78% Pepsi Bottling Ventures Loan 18,677 — 3.69% October 2024 3.92% AIG Loan II 126,970 126,970 4.15% November 2025 4.93% BOA Loan 375,000 375,000 3.77% October 2027 3.91% BOA/KeyBank Loan 250,000 250,000 4.32% May 2028 4.14% AIG Loan 104,352 105,762 4.96% February 2029 5.08% Total Mortgage Debt 1,031,115 1,017,572 Revolving Credit Facility (3) 401,500 211,500 LIBO Rate + 1.60% June 2023 1.88% 2023 Term Loan 200,000 200,000 LIBO Rate + 1.55% June 2023 1.80% 2024 Term Loan 400,000 400,000 LIBO Rate + 1.55% April 2024 1.79% 2026 Term Loan 150,000 150,000 LIBO Rate + 1.85% April 2026 2.06% Total Debt 2,182,615 1,979,072 Unamortized Deferred Financing Costs and Discounts, net (8,263) (9,968) Total Debt, net $ 2,174,352 $ 1,969,104 (1) Including the effect of the interest rate swap agreements with a total notional amount of $750.0 million, the weighted average interest rate as of September 30, 2020 was 3.56% for both the Company’s fixed-rate and variable-rate debt combined and 3.96% for the Company’s fixed-rate debt only. (2) Reflects the effective interest rate as of September 30, 2020 and includes the effect of amortization of discounts/premiums and deferred financing costs. (3) The LIBO rate as of September 1, 2020 (ef fe two one |
Interest Rate Contracts (Tables
Interest Rate Contracts (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of Interest Rate Swaps | The following table sets forth a summary of the interest rate swaps at September 30, 2020 and December 31, 2019: Fair Value (1) Current Notional Amounts Derivative Instrument Effective Date Maturity Date Interest Strike Rate September 30, 2020 December 31, 2019 September 30, 2020 December 31, 2019 Liabilities: Interest Rate Swap 3/10/2020 7/1/2025 0.83% $ (3,374) $ — $ 150,000 $ — Interest Rate Swap 3/10/2020 7/1/2025 0.84% (2,300) — 100,000 — Interest Rate Swap 3/10/2020 7/1/2025 0.86% (1,791) — 75,000 — Interest Rate Swap 7/1/2020 7/1/2025 2.82% (15,064) (7,038) 125,000 125,000 Interest Rate Swap 7/1/2020 7/1/2025 2.82% (12,074) (5,651) 100,000 100,000 Interest Rate Swap 7/1/2020 7/1/2025 2.83% (12,084) (5,665) 100,000 100,000 Interest Rate Swap 7/1/2020 7/1/2025 2.84% (12,165) (5,749) 100,000 100,000 Interest Rate Swap 7/9/2015 7/1/2020 1.69% — (43) — 425,000 Total $ (58,852) $ (24,146) $ 750,000 $ 850,000 (1) The Company records all derivative instruments on a gross basis in the consolidated balance sheets, and accordingly, there are no offsetting amounts that net assets against liabilities. As of September 30, 2020, derivatives in a liability position are included in the line item "Interest rate swap liability" in the consolidated balance sheets at fair value. |
Impact of Interest Rate Swap on Consolidated Statements of Operation | The following table sets forth the impact of the interest rate swaps on the consolidated statements of operations for the periods presented: Nine Months Ended September 30, 2020 2019 Interest Rate Swap in Cash Flow Hedging Relationship: Amount recognized in AOCI on derivatives $ (39,716) $ (25,849) Amount of loss (gain) reclassified from AOCI into earnings under “Interest expense” $ 5,104 $ (2,231) Total interest expense presented in the consolidated statement of operations in which the effects of cash flow hedges are recorded $ 59,321 $ 53,642 |
Accrued Expenses and Other Li_2
Accrued Expenses and Other Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses and Other Liabilities | Accrued expenses and other liabilities consisted of the following as of September 30, 2020 and December 31, 2019: September 30, 2020 December 31, 2019 Accrued tenant improvements $ 26,891 $ 11,802 Real estate taxes payable 18,899 13,385 Prepaid tenant rent 17,429 20,510 Interest payable 10,011 12,264 Deferred compensation 8,687 9,209 Property operating expense payable 7,667 7,752 Accrued CIP 6,902 4,794 Other liabilities 21,771 16,673 Total $ 118,257 $ 96,389 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measure at Fair Value on a Recurring Basis | The following table sets forth the assets and liabilities that the Company measures at fair value on a recurring basis by level within the fair value hierarchy as of September 30, 2020 and December 31, 2019: Assets/(Liabilities) Total Fair Value Quoted Prices in Active Markets for Identical Assets and Liabilities Significant Other Observable Inputs Significant Unobservable Inputs September 30, 2020 Interest Rate Swap Liability $ (58,852) $ — $ (58,852) $ — Corporate Owned Life Insurance Asset $ 4,070 $ — $ 4,070 $ — Mutual Funds Asset $ 6,054 $ 6,054 $ — $ — Deferred Compensation Liability $ (8,687) $ — $ (8,687) $ — December 31, 2019 Interest Rate Swap Liability $ (24,146) $ — $ (24,146) $ — Earn-out Liability (due to affiliates) $ (2,919) $ — $ — $ (2,919) Corporate Owned Life Insurance Asset $ 2,134 $ — $ 2,134 $ — Mutual Funds Asset $ 6,983 $ 6,983 $ — $ — Deferred Compensation Liability $ (9,209) $ — $ (9,209) $ — |
Quantitative Information Related to Non-recurring Fair Value Measurements for Impairment | The following table is a summary of the quantitative information related to the non-recurring fair value measurement for the impairment of the Company's real estate properties as of September 30, 2020: Range of Inputs or Inputs Unobservable Inputs: 2200 Channahon Road Houston Westway I 2275 Cabot Drive Market rent per square foot $2.00 to $3.00 $15.00 to $17.00 $11.00 to $12.00 Terminal capitalization rate 9.75% 7.75% 9.00% Discount rate 14.00% 9.00% 10.25% |
Schedule of Carrying Values and Estimated Fair Values of Financial Instruments | The fair value o f the ten mor tgage loa ns in the table below is estimated by discounting each loan’s principal balance over the remaining term of the mortgage using current borrowing rates available to the Company for debt instruments with similar terms and maturities. The Company determined that the mortgage debt valuation in its entirety is classified in Level 2 of the fair value hierarchy, as the fair value is based on current pricing for debt with similar terms as the in-place debt. September 30, 2020 December 31, 2019 Fair Value Carrying Value (1) Fair Value Carrying Value (1) BOA Loan $ 357,417 $ 375,000 $ 369,343 $ 375,000 BOA/KeyBank Loan $ 263,840 $ 250,000 $ 264,101 $ 250,000 AIG Loan II $ 120,651 $ 126,970 $ 122,258 $ 126,970 AIG Loan $ 103,110 $ 104,352 $ 101,663 $ 105,762 Midland Mortgage Loan $ 98,077 $ 98,687 $ 99,318 $ 100,249 Samsonite Loan $ 21,418 $ 20,418 $ 22,103 $ 21,154 HealthSpring Mortgage Loan $ 20,621 $ 20,340 $ 20,868 $ 20,723 Pepsi Bottling Ventures Loan $ 19,054 $ 18,677 $ — $ — Highway 94 Loan $ 14,663 $ 14,922 $ 15,101 $ 15,610 Emporia Partners Mortgage Loan $ 1,780 $ 1,749 $ 2,105 $ 2,104 (1) The carrying values do not include the debt premium/(discount) or deferred financing costs as of September 30, 2020 and December 31, 2019. See Note 5, Debt |
Equity (Tables)
Equity (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Schedule of Share Redemption Activity | The following table summarizes share redemption (excluding the self-tender offer) activity during the three and nine months ended September 30, 2020 and 2019: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Shares of common stock redeemed 693,199 10,589,361 1,241,812 10,589,361 Weighted average price per share $ 8.86 $ 9.54 $ 9.07 $ 9.54 |
Noncontrolling Interests (Table
Noncontrolling Interests (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Noncontrolling Interest [Abstract] | |
Schedule of Activity for Noncontrolling Interests | The following summarizes the activity for noncontrolling interests recorded as equity for the nine months ended September 30, 2020 and year ended December 31, 2019: Nine Months Ended September 30, 2020 Year Ended December 31, 2019 Beginning balance $ 245,040 $ 232,203 Contributions/issuance of noncontrolling interests — 30,039 Reclass of noncontrolling interest subject to redemption 263 — Repurchase of noncontrolling interest (1,137) — Issuance of stock dividend for noncontrolling interest 1,068 1,861 Distributions to noncontrolling interests (10,556) (19,716) Allocated distributions to noncontrolling interests subject to redemption (23) (42) Net (loss) income (598) 3,749 Other comprehensive loss (4,165) (3,054) Ending balance $ 229,892 $ 245,040 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | Summarized below are the related party costs incurred by the Company for the nine months ended September 30, 2020 and 2019, respectively, and any related amounts receivable and payable as of September 30, 2020 and December 31, 2019: Incurred for the Nine Months Ended Receivable as of September 30, September 30, December 31, 2020 2019 2020 2019 Assets Assumed through the Self-Administration Transaction Cash to be received from an affiliate related to deferred compensation and other payroll costs $ — $ 658 $ — $ — Other fees 150 — 201 352 Due from GCC Reimbursable Expense Allocation 16 — 5 4 Payroll/Expense Allocation 300 321 781 481 Due from Affiliates Payroll/Expense Allocation — 1,217 — — O&O Costs (including payroll allocated to O&O) — 157 — — Other Fees — 6,375 — — Total $ 466 $ 8,728 $ 987 $ 837 Incurred for the Nine Months Ended Payable as of September 30, September 30, December 31, 2020 2019 2020 2019 Expensed Costs advanced by the advisor $ 1,546 $ 2,571 $ 1,120 $ 1,164 Consulting fee - shared services 1,875 1,874 631 441 Disposition fees — 641 — — Capitalized Leasing commissions — 596 — — Acquisition fees — 942 — — Assumed through Self- Administration Transaction/Mergers Earn-out — — 338 2,919 Stockholder Servicing Fee — 693 2,354 4,994 Other fees — 20 — — Other Distributions 8,353 10,089 712 1,365 Total $ 11,774 $ 17,426 $ 5,155 $ 10,883 |
Operating Leases (Tables)
Operating Leases (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Schedule of Future Minimum Base Rents to be Received | The following table sets forth the undiscounted cash flows for future minimum base rents to be received under operating leases as of September 30, 2020: As of September 30, 2020 Remaining 2020 $ 72,450 2021 303,943 2022 305,905 2023 292,005 2024 251,481 Thereafter 1,137,808 Total $ 2,363,592 |
Schedule of Lease, Cost | The following table sets forth the weighted-average for the lease term and the discount rate as of September 30, 2020: Lease Term and Discount Rate As of September 30, 2020 Weighted-average remaining lease term in years. 80.3 Weighted-average discount rate (1) 4.98% (1) Because the rate implicit in each of the Company's leases was not readily determinable, the Company used an incremental borrowing rate. In determining the Company's incremental borrowing rate for each lease, the Company considered recent rates on secured borrowings, observable risk-free interest rates and credit spreads correlating to the Company's creditworthiness, the impact of collateralization and the term of each of the Company's lease agreements. |
Schedule of Remaining Required Payments Under Ground Leases | Maturities of lease liabilities as of September 30, 2020 were as follows: As of September 30, 2020 Remaining 2020 $ 407 2021 1,632 2022 1,675 2023 1,741 2024 1,776 Thereafter 286,738 Total undiscounted lease payments 293,969 Less: imputed interest (248,483) Total lease liabilities $ 45,486 |
Organization - Narrative (Detai
Organization - Narrative (Details) $ in Thousands | Sep. 20, 2017USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)propertyshares | Dec. 31, 2019USD ($)shares | Apr. 30, 2019shares | Jun. 30, 2015shares | |
Subsidiary, Sale of Stock [Line Items] | |||||||
Partnership units issued ( in shares) | 1 | ||||||
Implied EA-1 common stock issued in consideration | 283,769,972 | ||||||
Limited liability partnership percentage of interest held (percent) | 87.80% | ||||||
Proceeds from sale of shares | $ | $ 2,800,000 | $ 2,800,000 | |||||
Number of shares outstanding (in shares) | 229,775,115 | 227,853,720 | |||||
Shares issued | $ | [1] | $ 230 | $ 228 | ||||
Units eligible towards redemption (in shares) | 556,099 | 554,110 | |||||
Sponsor and Affiliates | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Limited liability partnership percentage of interest held (percent) | 10.60% | ||||||
Number of properties contributed | property | 5 | ||||||
Third Parties | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Limited liability partnership percentage of interest held (percent) | 1.60% | ||||||
Board Chairman | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Partnership units owned (in shares) | 2,400,000 | ||||||
Follow-on Offering | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Proceeds from issuance of private placement | $ | $ 2,200,000 | $ 116,400 | |||||
Implied EA-1 common stock issued in consideration | 12,250,750 | ||||||
Private Offering | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Proceeds from issuance of private placement | $ | 2,000,000 | ||||||
Implied EA-1 common stock issued in consideration | 43,772,611 | ||||||
Distribution Reinvestment Plan | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Proceeds from issuance of private placement | $ | $ 200,000 | ||||||
Shares issued | $ | $ 310,800 | $ 293,700 | |||||
Units eligible towards redemption (in shares) | 151,178 | ||||||
Common Class E | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Exchange ratio | 1.04807 | ||||||
Number of shares outstanding (in shares) | 154,952,279 | ||||||
Common Class E | Private Offering | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Implied EA-1 common stock issued in consideration | 174,981,547 | ||||||
[1] | See Note 9, Equity , for the number of shares outstanding of each class of common stock as of September 30, 2020. |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies - Narrative (Details) | 9 Months Ended |
Sep. 30, 2020segment | |
Accounting Policies [Abstract] | |
Number of reportable segments | 1 |
Real Estate - Narrative (Detail
Real Estate - Narrative (Details) $ in Thousands | Jun. 30, 2020USD ($) | Sep. 30, 2020USD ($)propertystateparcel | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)propertyparcelstate | Sep. 30, 2019USD ($) |
Real Estate [Line Items] | |||||
Number of properties | property | 99 | 99 | |||
Number of states | state | 25 | 25 | |||
Number of land parcels held for future development | parcel | 1 | 1 | |||
Purchase price | $ 4,200,000 | $ 4,200,000 | |||
Depreciation | 69,956 | $ 57,473 | |||
Amortization expense | 50,990 | 54,838 | |||
Proceeds from disposition of properties | 23,480 | 46,784 | |||
Gain from disposition of assets | 0 | $ 8,441 | 4,268 | 8,441 | |
Impairment provision | $ 9,572 | $ 0 | 22,195 | $ 0 | |
Number of properties impaired | property | 3 | ||||
Bank of America II Property | |||||
Real Estate [Line Items] | |||||
Proceeds from disposition of properties | $ 24,500 | ||||
Gain from disposition of assets | 4,300 | ||||
Bank of America II Property | Property | |||||
Real Estate [Line Items] | |||||
Carrying value of property | $ 19,600 | ||||
2200 Channahon Road and Houston Westway I | |||||
Real Estate [Line Items] | |||||
Impairment provision | $ 22,200 | ||||
Number of properties impaired | property | 3 | ||||
Discount Rate | Maximum | |||||
Real Estate [Line Items] | |||||
Discount rate (percent) | 0.0625 | 0.0625 |
Real Estate - Summary of Proper
Real Estate - Summary of Property Acquired (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2020USD ($)ft² | |
Real Estate [Line Items] | |
Purchase Price | $ 4,200,000 |
Pepsi Bottling Ventures | |
Real Estate [Line Items] | |
Purchase Price | $ 34,937 |
Square Feet | ft² | 526,320 |
Acquisition fees | $ 386 |
Real Estate - Summary of Purcha
Real Estate - Summary of Purchase Price Allocation of Properties Acquired (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Real Estate [Line Items] | ||
Land | $ 451,696 | $ 458,339 |
In-place lease valuation (below market) | (68,334) | $ (67,622) |
Pepsi Bottling Ventures | ||
Real Estate [Line Items] | ||
Land | 3,407 | |
Building | 26,813 | |
Improvements | 954 | |
Tenant origination and absorption costs | 4,970 | |
In-place lease valuation (below market) | (712) | |
Debt discount / (premium) | (109) | |
Total | $ 35,323 |
Real Estate - Intangibles (Deta
Real Estate - Intangibles (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Schedule of in-place lease valuation | ||
In-place lease valuation (above market) | $ 43,605 | $ 44,012 |
In-place lease valuation (above market) - accumulated amortization | (35,024) | (33,322) |
In-place lease valuation (above market), net | 8,581 | 10,690 |
Ground leasehold interest (below market) | 2,254 | 2,254 |
Ground leasehold interest (below market) - accumulated amortization | (184) | (164) |
Ground leasehold interest (below market), net | 2,070 | 2,090 |
Intangible assets, net | 10,651 | 12,780 |
In-place lease valuation (below market) | (68,334) | (67,622) |
Land leasehold interest (above market) | (3,073) | (3,073) |
In-place lease valuation & land leasehold interest - accumulated amortization | 42,859 | 38,890 |
Intangible liabilities, net | (28,548) | (31,805) |
Tenant origination and absorption cost | 745,039 | 744,773 |
Tenant origination and absorption cost - accumulated amortization | (399,005) | (354,379) |
Tenant origination and absorption cost, net | $ 346,034 | $ 390,394 |
Real Estate - Leasing Costs For
Real Estate - Leasing Costs For Next Five Years (Details) $ in Thousands | Sep. 30, 2020USD ($) |
In-place lease valuation, net | |
Remaining 2020 | $ (525,000) |
2021 | (2,118,000) |
2022 | (2,518,000) |
2023 | (2,465,000) |
2024 | (1,648,000) |
2025 | (1,186,000) |
Tenant origination and absorption costs | |
Remaining 2020 | 14,870,000 |
2021 | 57,846,000 |
2022 | 54,744,000 |
2023 | 50,184,000 |
2024 | 38,006,000 |
2025 | 27,450,000 |
Ground leasehold interest | |
Remaining 2020 | (73,000) |
2021 | (290,000) |
2022 | (290,000) |
2023 | (290,000) |
2024 | (291,000) |
2025 | (290,000) |
Other leasing costs | |
Remaining 2020 | 1,372,000 |
2021 | 6,057,000 |
2022 | 6,063,000 |
2023 | 5,934,000 |
2024 | 5,700,000 |
2025 | $ 5,580,000 |
Real Estate - Restricted Cash (
Real Estate - Restricted Cash (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Real Estate [Line Items] | ||
Restricted cash | $ 35,831 | $ 58,430 |
Real Estate Asset Acquisitions and Contributions | ||
Real Estate [Line Items] | ||
Restricted cash | 35,831 | 58,430 |
Real Estate Asset Acquisitions and Contributions | Cash reserves | ||
Real Estate [Line Items] | ||
Restricted cash | 22,909 | 48,129 |
Real Estate Asset Acquisitions and Contributions | Restricted lockbox | ||
Real Estate [Line Items] | ||
Restricted cash | $ 12,922 | $ 10,301 |
Investments in Unconsolidated_3
Investments in Unconsolidated Entities - Narrative (Details) | 1 Months Ended | 9 Months Ended | |||||
Sep. 30, 2014USD ($)ft²extension | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 09, 2020USD ($) | Dec. 31, 2019USD ($) | Mar. 29, 2019USD ($) | Jun. 30, 2018ft² | |
Schedule of Equity Method Investments [Line Items] | |||||||
Contributions | $ 8,160,000 | $ 0 | |||||
Assets | 4,223,950,000 | $ 4,175,502,000 | |||||
Receivable | $ 987,000 | $ 837,000 | |||||
Heritage Commons X | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Area of real estate property (in sqft) | ft² | 200,000 | ||||||
Digital Realty | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Area of real estate property (in sqft) | ft² | 132,300 | ||||||
Equity method investment, ownership (percent) | 80.00% | ||||||
Contributions | $ 68,400,000 | ||||||
Assets | 187,500,000 | ||||||
Debt | 102,000,000 | ||||||
Weighted average remaining lease terms | 3 years 6 months | ||||||
Guaranteed rate of return (percent) | 7.00% | ||||||
Receivable | $ 4,100,000 | ||||||
Digital Realty | The Loan | Secured term loan | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Secured term loan | $ 102,000,000 | ||||||
Number of term extensions | extension | 2 | ||||||
Duration of each extension term | 12 months | ||||||
Outstanding letter of credit | $ 8,200,000 | $ 8,200,000 | |||||
Mercedes-Benz Financial Services USA | Heritage Commons X | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Portion of building leased out (percent) | 100.00% |
Investments in Unconsolidated_4
Investments in Unconsolidated Entities - Balance of Investments (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Investments [Roll Forward] | |||||
Balance as of December 31, 2019 | $ 11,028 | ||||
Net loss | $ (4,452) | $ 3,027 | (6,523) | $ 1,919 | |
Contributions | 8,160 | $ 0 | |||
September 30, 2020 | 34 | 34 | |||
Unconsolidated investments | |||||
Investments [Roll Forward] | |||||
Balance as of December 31, 2019 | 11,028 | ||||
Net loss | (165) | ||||
Distributions | (8,530) | ||||
Contributions | 8,160 | ||||
Liquidation value adjustment | (4,452) | ||||
Impairment | (1,907) | ||||
Clawback receivable reclass | (4,100) | ||||
September 30, 2020 | 34 | 34 | |||
Digital Realty | |||||
Investments [Roll Forward] | |||||
Contributions | $ 68,400 | ||||
Digital Realty | Unconsolidated investments | |||||
Investments [Roll Forward] | |||||
Balance as of December 31, 2019 | 10,584 | ||||
Net loss | (165) | ||||
Distributions | (8,120) | ||||
Contributions | 8,160 | ||||
Liquidation value adjustment | (4,452) | ||||
Impairment | (1,907) | ||||
Clawback receivable reclass | (4,100) | ||||
September 30, 2020 | 0 | 0 | |||
Heritage Commons X | Unconsolidated investments | |||||
Investments [Roll Forward] | |||||
Balance as of December 31, 2019 | 444 | ||||
Net loss | 0 | ||||
Distributions | (410) | ||||
Contributions | 0 | ||||
Liquidation value adjustment | 0 | ||||
Impairment | 0 | ||||
Clawback receivable reclass | 0 | ||||
September 30, 2020 | $ 34 | $ 34 |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 01, 2020 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | |||
Total principal | $ 2,182,615,000 | $ 1,979,072,000 | |
Unamortized Deferred Financing Costs and Discounts, net | (8,263,000) | (9,968,000) | |
Total Debt, net | 2,174,352,000 | 1,969,104,000 | |
Interest Rate Swap | |||
Debt Instrument [Line Items] | |||
Derivative notional amount | 750,000,000 | ||
LIBOR | |||
Debt Instrument [Line Items] | |||
Effective interest rate (percent) | 0.16% | ||
Mortgages | |||
Debt Instrument [Line Items] | |||
Total principal | $ 1,031,115,000 | 1,017,572,000 | |
Fixed and variable rate debt | Interest Rate Swap | |||
Debt Instrument [Line Items] | |||
Weighted average interest rate | 3.56% | ||
Fixed rate debt | Interest Rate Swap | |||
Debt Instrument [Line Items] | |||
Weighted average interest rate | 3.96% | ||
HealthSpring Mortgage Loan | Mortgages | |||
Debt Instrument [Line Items] | |||
Total principal | $ 20,340,000 | 20,723,000 | |
Contractual stated interest rate (percent) | 4.18% | ||
Effective interest rate (percent) | 4.62% | ||
Midland Mortgage Loan | Mortgages | |||
Debt Instrument [Line Items] | |||
Total principal | $ 98,687,000 | 100,249,000 | |
Contractual stated interest rate (percent) | 3.94% | ||
Effective interest rate (percent) | 4.12% | ||
Emporia Partners Mortgage Loan | Mortgages | |||
Debt Instrument [Line Items] | |||
Total principal | $ 1,749,000 | 2,104,000 | |
Contractual stated interest rate (percent) | 5.88% | ||
Effective interest rate (percent) | 5.97% | ||
Samsonite Loan | Mortgages | |||
Debt Instrument [Line Items] | |||
Total principal | $ 20,418,000 | 21,154,000 | |
Contractual stated interest rate (percent) | 6.08% | ||
Effective interest rate (percent) | 5.10% | ||
Highway 94 Loan | Mortgages | |||
Debt Instrument [Line Items] | |||
Total principal | $ 14,922,000 | 15,610,000 | |
Contractual stated interest rate (percent) | 3.75% | ||
Effective interest rate (percent) | 4.78% | ||
Pepsi Bottling Ventures Loan | Mortgages | |||
Debt Instrument [Line Items] | |||
Total principal | $ 18,677,000 | 0 | |
Contractual stated interest rate (percent) | 3.69% | ||
Effective interest rate (percent) | 3.92% | ||
AIG Loan II | Mortgages | |||
Debt Instrument [Line Items] | |||
Total principal | $ 126,970,000 | 126,970,000 | |
Contractual stated interest rate (percent) | 4.15% | ||
Effective interest rate (percent) | 4.93% | ||
BOA Loan | Mortgages | |||
Debt Instrument [Line Items] | |||
Total principal | $ 375,000,000 | 375,000,000 | |
Contractual stated interest rate (percent) | 3.77% | ||
Effective interest rate (percent) | 3.91% | ||
BOA/KeyBank Loan | Mortgages | |||
Debt Instrument [Line Items] | |||
Total principal | $ 250,000,000 | 250,000,000 | |
Contractual stated interest rate (percent) | 4.32% | ||
Effective interest rate (percent) | 4.14% | ||
AIG Loan | Mortgages | |||
Debt Instrument [Line Items] | |||
Total principal | $ 104,352,000 | 105,762,000 | |
Contractual stated interest rate (percent) | 4.96% | ||
Effective interest rate (percent) | 5.08% | ||
Revolving Credit Facility | Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Total principal | $ 401,500,000 | 211,500,000 | |
Effective interest rate (percent) | 1.88% | ||
Spread on LIBOR (percent) | 1.60% | ||
Initial debt instrument term | 2 years | ||
Debt instrument extended term | 1 year | ||
2023 Term Loan | |||
Debt Instrument [Line Items] | |||
Effective interest rate (percent) | 1.80% | ||
2023 Term Loan | Term Loans | |||
Debt Instrument [Line Items] | |||
Total principal | $ 200,000,000 | 200,000,000 | |
Spread on LIBOR (percent) | 1.55% | ||
2024 Term Loan | |||
Debt Instrument [Line Items] | |||
Effective interest rate (percent) | 1.79% | ||
2024 Term Loan | Term Loans | |||
Debt Instrument [Line Items] | |||
Total principal | $ 400,000,000 | 400,000,000 | |
Spread on LIBOR (percent) | 1.55% | ||
2026 Term Loan | |||
Debt Instrument [Line Items] | |||
Effective interest rate (percent) | 2.06% | ||
2026 Term Loan | Term Loans | |||
Debt Instrument [Line Items] | |||
Total principal | $ 150,000,000 | $ 150,000,000 | |
Spread on LIBOR (percent) | 1.85% |
Debt - Narrative (Details)
Debt - Narrative (Details) $ in Thousands | 9 Months Ended | |||
Sep. 30, 2020USD ($)quarterproperty | Feb. 05, 2020USD ($) | Dec. 31, 2019USD ($) | Apr. 30, 2019loan | |
Debt Instrument [Line Items] | ||||
Number of term loans | loan | 3 | |||
Debt | $ 2,174,352 | $ 1,969,104 | ||
Term Loans | Keybank Loans | ||||
Debt Instrument [Line Items] | ||||
Compliance requirement - maximum consolidated leverage ratio (percent) | 60.00% | |||
Compliance requirement - maximum consolidated leverage ratio after material acquisition (percent) | 65.00% | |||
Compliance requirement - consecutive quarters after material acquisition subject to higher consolidated leverage ratio | quarter | 4 | |||
Compliance requirement - minimum consolidated tangible net worth (percent) | 75.00% | |||
Compliance requirement - minimum consolidated tangible net worth | $ 2,000,000 | |||
Compliance requirement - additional net future equity issuances (percent) | 75.00% | |||
Compliance requirement - reduction for amount of payments used to redeem stock (percent) | 75.00% | |||
Compliance requirement - minimum consolidated fixed charge coverage ratio | 1.50 | |||
Compliance requirement - maximum total secured debt ratio (percent) | 40.00% | |||
Compliance requirement - increase in maximum total secured coverage ratio after material acquisition (percent) | 5.00% | |||
Compliance requirement - number of quarters subject to higher maximum total secured coverage ratio after material acquisition | quarter | 4 | |||
Compliance requirement - minimum unsecured interest coverage ratio | 2 | |||
Compliance requirement - maximum total secured recourse debt ratio (percent) | 10.00% | |||
Compliance requirement - maximum aggregate maximum unhedged variable rate debt (percent) | 30.00% | |||
Compliance requirement - maximum payout ratio (percent) | 95.00% | |||
Restrictions - maximum unimproved land as percentage of total asset value (percent) | 5.00% | |||
Restrictions - pre-leased developments under development as a percentage of total asset value, maximum (percent) | 20.00% | |||
Restrictions - investments in unconsolidated affiliates as percentage of total asset value, maximum (percent) | 10.00% | |||
Restrictions - investments in mortgage notes receivable as percentage of total asset value, maximum (percent) | 15.00% | |||
Restrictions - leased assets under renovation as percentage of total asset value, maximum (percent) | 10.00% | |||
Restrictions - aggregate investment limitations as a percentage of total asset value, maximum (percent) | 25.00% | |||
Mortgages | Pepsi Bottling Ventures Loan | ||||
Debt Instrument [Line Items] | ||||
Fixed interest rate | 3.69% | |||
Revolving Credit Facility | Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Covenant - minimum pool properties | property | 15 | |||
Covenant -maximum pool value contributed by single pool property of tenant (percent) | 15.00% | |||
Covenant - maximum aggregate pool value to be contributed by pool properties subject to ground leases (percent) | 15.00% | |||
Covenant - maximum aggregate pool value to be contributed by pool properties under development (percent) | 20.00% | |||
Covenant - minimum aggregate leasing percentage (percent) | 90.00% | |||
Covenant - maximum unsecured leverage ratio (percent) | 60.00% | |||
Covenant - minimum unsecured interest coverage ratio | 2 | |||
Pepsi Bottling Ventures | Mortgages | Pepsi Bottling Ventures Loan | ||||
Debt Instrument [Line Items] | ||||
Debt | $ 18,900 | |||
Fixed interest rate | 3.69% |
Interest Rate Contracts - Narra
Interest Rate Contracts - Narrative (Details) | Jul. 01, 2020USD ($) | Mar. 10, 2020USD ($)contract | Sep. 30, 2020USD ($) | Aug. 31, 2020swap_agreement | Dec. 31, 2019USD ($) | Jul. 09, 2015USD ($)swap_agreement |
Derivative [Line Items] | ||||||
Income expected to be recognized in earnings in next 12 months | $ 13,800,000 | |||||
Interest Rate Swap | ||||||
Derivative [Line Items] | ||||||
Number of interest rate swap agreements executed | 3 | 4 | 1 | |||
Term of interest rate contracts | 5 years | 5 years | ||||
Derivative notional amount | $ 425,000,000 | 750,000,000 | $ 850,000,000 | $ 425,000,000 | ||
Fair value of interest rate swap in a net asset liability position | 58,852,000 | 24,146,000 | ||||
Interest Rate Swap, Effective March 10, 2020 - $150,000 Notional Amount, Interest Rate 0.83% | ||||||
Derivative [Line Items] | ||||||
Derivative notional amount | $ 150,000,000 | 150,000,000 | 0 | |||
Fair value of interest rate swap in a net asset liability position | 3,374,000 | 0 | ||||
Interest Rate Swap Effective Date July 1, 2020,$125,000 Notional Amount, Interest Rate 2.82% | ||||||
Derivative [Line Items] | ||||||
Derivative notional amount | 100,000,000 | 125,000,000 | 125,000,000 | |||
Fair value of interest rate swap in a net asset liability position | 15,064,000 | 7,038,000 | ||||
Interest Rate Swap, Effective March 10, 2020 - $75,000 Notional Amount, Interest Rate 0.86% | ||||||
Derivative [Line Items] | ||||||
Derivative notional amount | $ 75,000,000 | 75,000,000 | 0 | |||
Fair value of interest rate swap in a net asset liability position | $ 1,791,000 | $ 0 |
Interest Rate Contracts - Summa
Interest Rate Contracts - Summary of Interest Rate Swaps (Details) - USD ($) | Sep. 30, 2020 | Jul. 01, 2020 | Mar. 10, 2020 | Dec. 31, 2019 | Jul. 09, 2015 |
Interest Rate Swap, Effective March 10, 2020 - $150,000 Notional Amount, Interest Rate 0.83% | |||||
Derivative [Line Items] | |||||
Interest strike rate (percent) | 0.83% | ||||
Fair value of interest rate swap in a net asset (liability) position | $ (3,374,000) | $ 0 | |||
Derivative notional amount | $ 150,000,000 | $ 150,000,000 | 0 | ||
Interest Rate Swap, Effective March 10, 2020 - $100,000 Notional Amount, Interest Rate 0.84% | |||||
Derivative [Line Items] | |||||
Interest strike rate (percent) | 0.84% | ||||
Fair value of interest rate swap in a net asset (liability) position | $ (2,300,000) | 0 | |||
Derivative notional amount | $ 100,000,000 | 0 | |||
Interest Rate Swap, Effective March 10, 2020 - $75,000 Notional Amount, Interest Rate 0.86% | |||||
Derivative [Line Items] | |||||
Interest strike rate (percent) | 0.86% | ||||
Fair value of interest rate swap in a net asset (liability) position | $ (1,791,000) | 0 | |||
Derivative notional amount | $ 75,000,000 | 75,000,000 | 0 | ||
Interest Rate Swap Effective Date July 1, 2020,$125,000 Notional Amount, Interest Rate 2.82% | |||||
Derivative [Line Items] | |||||
Interest strike rate (percent) | 2.82% | ||||
Fair value of interest rate swap in a net asset (liability) position | $ (15,064,000) | (7,038,000) | |||
Derivative notional amount | $ 125,000,000 | $ 100,000,000 | 125,000,000 | ||
Interest Rate Swap Effective Date July 1, 2020 | |||||
Derivative [Line Items] | |||||
Interest strike rate (percent) | 2.82% | ||||
Fair value of interest rate swap in a net asset (liability) position | $ (12,074,000) | (5,651,000) | |||
Derivative notional amount | $ 100,000,000 | 100,000,000 | |||
Interest Rate Swap Effective Date July 1, 2020 | |||||
Derivative [Line Items] | |||||
Interest strike rate (percent) | 2.83% | ||||
Fair value of interest rate swap in a net asset (liability) position | $ (12,084,000) | (5,665,000) | |||
Derivative notional amount | $ 100,000,000 | 100,000,000 | |||
Interest Rate Swap Effective Date July 1, 2020 | |||||
Derivative [Line Items] | |||||
Interest strike rate (percent) | 2.84% | ||||
Fair value of interest rate swap in a net asset (liability) position | $ (12,165,000) | (5,749,000) | |||
Derivative notional amount | $ 100,000,000 | 100,000,000 | |||
Interest Rate Swap Effective Date July 9, 2015 | |||||
Derivative [Line Items] | |||||
Interest strike rate (percent) | 1.69% | ||||
Fair value of interest rate swap in a net asset (liability) position | $ 0 | (43,000) | |||
Derivative notional amount | 0 | 425,000,000 | |||
Interest Rate Swap | |||||
Derivative [Line Items] | |||||
Fair value of interest rate swap in a net asset (liability) position | (58,852,000) | (24,146,000) | |||
Derivative notional amount | $ 750,000,000 | $ 425,000,000 | $ 850,000,000 | $ 425,000,000 |
Interest Rate Contracts - Impac
Interest Rate Contracts - Impact of Interest Rate Swap on Consolidated Statements of Operation (Details) - Interest Rate Swap - Cash Flow Hedging - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount recognized in AOCI on derivatives | $ (39,716) | $ (25,849) |
Amount of loss (gain) reclassified from AOCI into earnings under “Interest expense” | 5,104 | (2,231) |
Total interest expense presented in the consolidated statement of operations in which the effects of cash flow hedges are recorded | $ 59,321 | $ 53,642 |
Accrued Expenses and Other Li_3
Accrued Expenses and Other Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 |
Payables and Accruals [Abstract] | |||
Accrued tenant improvements | $ 26,891 | $ 11,802 | $ 0 |
Real estate taxes payable | 18,899 | 13,385 | |
Prepaid tenant rent | 17,429 | 20,510 | |
Interest payable | 10,011 | 12,264 | |
Deferred compensation | 8,687 | 9,209 | |
Property operating expense payable | 7,667 | 7,752 | |
Accrued CIP | 6,902 | 4,794 | |
Other liabilities | 21,771 | 16,673 | |
Total | $ 118,257 | $ 96,389 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Interest Rate Swap Liability | $ (58,852) | $ (24,146) |
Recurring Basis | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Earn-out Liability (due to affiliates) | (2,919) | |
Corporate Owned Life Insurance Asset | 4,070 | 2,134 |
Mutual Funds Asset | 6,054 | 6,983 |
Deferred Compensation Liability | (8,687) | (9,209) |
Recurring Basis | Quoted Prices in Active Markets for Identical Assets and Liabilities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Earn-out Liability (due to affiliates) | 0 | |
Corporate Owned Life Insurance Asset | 0 | 0 |
Mutual Funds Asset | 6,054 | 6,983 |
Deferred Compensation Liability | 0 | 0 |
Recurring Basis | Significant Other Observable Inputs | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Earn-out Liability (due to affiliates) | 0 | |
Corporate Owned Life Insurance Asset | 4,070 | 2,134 |
Mutual Funds Asset | 0 | 0 |
Deferred Compensation Liability | (8,687) | (9,209) |
Recurring Basis | Significant Unobservable Inputs | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Earn-out Liability (due to affiliates) | (2,919) | |
Corporate Owned Life Insurance Asset | 0 | 0 |
Mutual Funds Asset | 0 | 0 |
Deferred Compensation Liability | 0 | 0 |
Recurring Basis | Interest Rate Swap | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Interest Rate Swap Liability | (58,852) | (24,146) |
Recurring Basis | Interest Rate Swap | Quoted Prices in Active Markets for Identical Assets and Liabilities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Interest Rate Swap Liability | 0 | 0 |
Recurring Basis | Interest Rate Swap | Significant Other Observable Inputs | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Interest Rate Swap Liability | (58,852) | (24,146) |
Recurring Basis | Interest Rate Swap | Significant Unobservable Inputs | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Interest Rate Swap Liability | $ 0 | $ 0 |
Fair Value Measurements - Non-r
Fair Value Measurements - Non-recurring Fair Value Measurements for Impairment (Details) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2020USD ($)property | Sep. 30, 2020USD ($)loan | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Number of properties impaired | property | 3 | |
Number of mortgage loans (in loan) | loan | 10 | |
Discounted Cash Flow Analyses | 2200 Channahon Road | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Terminal capitalization rate (percent) | 9.75% | 9.75% |
Discount rate (percent) | 14.00% | 14.00% |
Discounted Cash Flow Analyses | Houston Westway I | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Terminal capitalization rate (percent) | 7.75% | 7.75% |
Discount rate (percent) | 9.00% | 9.00% |
Discounted Cash Flow Analyses | 2275 Cabot Drive | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Terminal capitalization rate (percent) | 9.00% | 9.00% |
Discount rate (percent) | 10.25% | 10.25% |
Minimum | Discounted Cash Flow Analyses | 2200 Channahon Road | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Market rent per Kilowatt-hour (kWh) | $ 2 | $ 2 |
Minimum | Discounted Cash Flow Analyses | Houston Westway I | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Market rent per Kilowatt-hour (kWh) | 15 | 15 |
Minimum | Discounted Cash Flow Analyses | 2275 Cabot Drive | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Market rent per Kilowatt-hour (kWh) | 11 | 11 |
Maximum | Discounted Cash Flow Analyses | 2200 Channahon Road | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Market rent per Kilowatt-hour (kWh) | 3 | 3 |
Maximum | Discounted Cash Flow Analyses | Houston Westway I | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Market rent per Kilowatt-hour (kWh) | 17 | 17 |
Maximum | Discounted Cash Flow Analyses | 2275 Cabot Drive | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Market rent per Kilowatt-hour (kWh) | $ 12 | $ 12 |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Instruments at Fair Value (Details) - Mortgages - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Fair Value | BOA Loan | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of mortgage loans | $ 357,417 | $ 369,343 |
Fair Value | BOA/KeyBank Loan | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of mortgage loans | 263,840 | 264,101 |
Fair Value | AIG Loan II | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of mortgage loans | 120,651 | 122,258 |
Fair Value | AIG Loan | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of mortgage loans | 103,110 | 101,663 |
Fair Value | Midland Mortgage Loan | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of mortgage loans | 98,077 | 99,318 |
Fair Value | Samsonite Loan | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of mortgage loans | 21,418 | 22,103 |
Fair Value | HealthSpring Mortgage Loan | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of mortgage loans | 20,621 | 20,868 |
Fair Value | Pepsi Bottling Ventures | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of mortgage loans | 19,054 | 0 |
Fair Value | Highway 94 Loan | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of mortgage loans | 14,663 | 15,101 |
Fair Value | Emporia Partners Mortgage Loan | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of mortgage loans | 1,780 | 2,105 |
Carrying Value | BOA Loan | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of mortgage loans | 375,000 | 375,000 |
Carrying Value | BOA/KeyBank Loan | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of mortgage loans | 250,000 | 250,000 |
Carrying Value | AIG Loan II | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of mortgage loans | 126,970 | 126,970 |
Carrying Value | AIG Loan | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of mortgage loans | 104,352 | 105,762 |
Carrying Value | Midland Mortgage Loan | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of mortgage loans | 98,687 | 100,249 |
Carrying Value | Samsonite Loan | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of mortgage loans | 20,418 | 21,154 |
Carrying Value | HealthSpring Mortgage Loan | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of mortgage loans | 20,340 | 20,723 |
Carrying Value | Pepsi Bottling Ventures | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of mortgage loans | 18,677 | 0 |
Carrying Value | Highway 94 Loan | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of mortgage loans | 14,922 | 15,610 |
Carrying Value | Emporia Partners Mortgage Loan | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of mortgage loans | $ 1,749 | $ 2,104 |
Equity - Narrative (Details)
Equity - Narrative (Details) | Jan. 15, 2020USD ($)shares | Sep. 30, 2020USD ($)vote$ / sharesshares | Dec. 31, 2019USD ($)shares | Sep. 30, 2019$ / sharesshares | Sep. 30, 2020USD ($)vote$ / sharesshares | Sep. 30, 2019$ / sharesshares | Sep. 30, 2019USD ($)shares | Sep. 30, 2020USD ($)voteshares | Sep. 30, 2020USD ($)vote$ / sharesshares | Jun. 30, 2020shares | Mar. 31, 2020shares | Jun. 30, 2019shares | Mar. 31, 2019shares | Dec. 31, 2018shares | |
Class of Stock [Line Items] | |||||||||||||||
Number of shares outstanding (in shares) | 229,775,115 | 227,853,720 | 229,775,115 | 229,775,115 | 229,775,115 | ||||||||||
Proceeds from sale of shares | $ | $ 2,800,000,000 | $ 2,800,000,000 | |||||||||||||
Number of shares issued (shares) | 283,769,972 | 283,769,972 | 283,769,972 | 283,769,972 | |||||||||||
Shares issued | $ | [1] | $ 230,000 | $ 228,000 | $ 230,000 | $ 230,000 | $ 230,000 | |||||||||
Share Redemption Program | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Minimum ownership balance (shares) | $ | 2,500 | $ 2,500 | 2,500 | 2,500 | |||||||||||
Minimum holding period for stock to be redeemed from stockholder by the Company | 1 year | ||||||||||||||
Distribution Reinvestment Plan | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Period for written notice | 10 days | ||||||||||||||
Shares issued | $ | $ 310,800,000 | $ 293,700,000 | $ 310,800,000 | $ 310,800,000 | $ 310,800,000 | ||||||||||
Maximum | Share Redemption Program | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Aggregate redemption of Company's shares (percent) | 5.00% | 5.00% | |||||||||||||
RSUs | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
RSU's issued (in shares) | 589,248 | ||||||||||||||
Vesting (percent) | 25.00% | ||||||||||||||
Fair value of grants issued | $ | $ 5,500,000 | ||||||||||||||
Total forfeitures (shares) | 3,209 | ||||||||||||||
Common Class T | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Number of votes each share is entitled to | vote | 1 | 1 | 1 | 1 | |||||||||||
Number of shares outstanding (in shares) | 555,730 | 555,730 | 555,730 | 555,730 | |||||||||||
Common Class S | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Number of votes each share is entitled to | vote | 1 | 1 | 1 | 1 | |||||||||||
Number of shares outstanding (in shares) | 1,800 | 1,800 | 1,800 | 1,800 | |||||||||||
Common Class D | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Number of votes each share is entitled to | vote | 1 | 1 | 1 | 1 | |||||||||||
Number of shares outstanding (in shares) | 40,791 | 40,791 | 40,791 | 40,791 | |||||||||||
Common Class I | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Number of votes each share is entitled to | vote | 1 | 1 | 1 | 1 | |||||||||||
Number of shares outstanding (in shares) | 1,894,561 | 1,894,561 | 1,894,561 | 1,894,561 | |||||||||||
Common Class A | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Number of votes each share is entitled to | vote | 1 | 1 | 1 | 1 | |||||||||||
Number of shares outstanding (in shares) | 24,227,432 | 24,227,432 | 24,227,432 | 24,227,432 | |||||||||||
Common Class AA | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Number of votes each share is entitled to | vote | 1 | 1 | 1 | 1 | |||||||||||
Number of shares outstanding (in shares) | 47,184,766 | 47,184,766 | 47,184,766 | 47,184,766 | |||||||||||
Common Class AAA | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Number of votes each share is entitled to | vote | 1 | 1 | 1 | 1 | |||||||||||
Number of shares outstanding (in shares) | 917,756 | 917,756 | 917,756 | 917,756 | |||||||||||
Common Class E | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Number of votes each share is entitled to | vote | 1 | 1 | 1 | 1 | |||||||||||
Number of shares outstanding (in shares) | 154,952,279 | 154,952,279 | 154,952,279 | 154,952,279 | |||||||||||
Common Class E | Share Redemption Program | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Excess of quarterly cap limitation (in shares) | 2,872,488 | ||||||||||||||
Excess of quarterly cap limitation | $ | $ 27,400,000 | ||||||||||||||
Percentage of redemption requests not redeemed (percent) | 25.00% | ||||||||||||||
Common Stock | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Number of shares outstanding (in shares) | 229,775,115 | 227,853,720 | 235,382,622 | 229,775,115 | 235,382,622 | 235,382,622 | 229,775,115 | 229,775,115 | 229,897,937 | 229,671,555 | 243,610,554 | 174,981,549 | 174,278,341 | ||
Common Stock | Share Redemption Program | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Stock redeemed during period (in shares) | 693,199 | 10,589,361 | 1,241,812 | 10,589,361 | 25,472,376 | ||||||||||
Stock redeemed, value | $ | $ 240,000,000 | ||||||||||||||
Weighted average price per share (in dollars per share) | $ / shares | $ 8.86 | $ 9.54 | $ 9.07 | $ 9.54 | $ 9.42 | ||||||||||
Redemption requests that were not redeemed (shares) | 693,199 | ||||||||||||||
Common Stock | Common Class E | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Number of shares contingently entitled to be received for each RSU (shares) | 1 | 1 | 1 | 1 | |||||||||||
[1] | See Note 9, Equity , for the number of shares outstanding of each class of common stock as of September 30, 2020. |
Equity - Schedule of Share Rede
Equity - Schedule of Share Redemptions (Details) - Common Stock - Share Redemption Program - $ / shares | 3 Months Ended | 9 Months Ended | 74 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | |
Class of Stock [Line Items] | |||||
Stock redeemed during period (in shares) | 693,199 | 10,589,361 | 1,241,812 | 10,589,361 | 25,472,376 |
Weighted average price per share (in dollars per share) | $ 8.86 | $ 9.54 | $ 9.07 | $ 9.54 | $ 9.42 |
Noncontrolling Interests - Narr
Noncontrolling Interests - Narrative (Details) - shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Noncontrolling Interest [Line Items] | ||
Percentage of noncontrolling interests based on weighted average shares outstanding (percent) | 12.01% | |
Limited partnership units issued (in shares) | 31,800,000 | |
Limited partnership units with mandatory hold period (in shares) | 20,400,000 | |
Implied EA-1 operating partnership units issued in consideration (in shares) | 200,000 | |
Partnership unit exchange (in shares) | 1 | |
Repurchase of noncontrolling Interest (in shares) | 134,383 | 6,000 |
Griffin Capital Essential Asset Operating Partnership, L.P. | ||
Noncontrolling Interest [Line Items] | ||
Percentage of noncontrolling interests based on total shares (percent) | 12.20% |
Noncontrolling Interests - Sche
Noncontrolling Interests - Schedule of Noncontrolling Interests Activity (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Dec. 31, 2019 | |
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | ||||||||
Reclass of noncontrolling interest subject to redemption | $ 10 | $ 253 | ||||||
Repurchase of noncontrolling interest | (641) | (496) | ||||||
Issuance of stock dividend for noncontrolling interest | 266 | $ 802 | $ 800 | $ 269 | ||||
Distributions to noncontrolling interest | (2,756) | (2,731) | (5,069) | (5,108) | (4,903) | $ (4,585) | ||
Net (loss) income | (9,773) | 3,758 | 848 | 10,088 | 16,088 | 6,530 | ||
Other comprehensive loss | 2,498 | (6,284) | (30,826) | (7,391) | (12,803) | (8,137) | ||
Non- controlling Interests | ||||||||
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | ||||||||
Beginning balance | 245,040 | 232,203 | $ 245,040 | $ 232,203 | ||||
Contributions/issuance of noncontrolling interests | 0 | 30,039 | ||||||
Reclass of noncontrolling interest subject to redemption | 10 | 253 | 263 | 0 | ||||
Repurchase of noncontrolling interest | (641) | (496) | (1,137) | 0 | ||||
Issuance of stock dividend for noncontrolling interest | 266 | 802 | 800 | 269 | 1,068 | 1,861 | ||
Distributions to noncontrolling interest | (2,756) | (2,731) | (5,069) | (5,108) | (4,903) | (4,585) | (10,556) | (19,716) |
Allocated distributions to noncontrolling interests subject to redemption | (23) | (42) | ||||||
Net (loss) income | (1,166) | 457 | 111 | 1,149 | 1,880 | 1,197 | (598) | 3,749 |
Other comprehensive loss | 299 | $ (756) | $ (3,708) | $ (835) | $ (1,489) | $ (1,408) | (4,165) | (3,054) |
Ending balance | $ 229,892 | $ 229,892 | $ 245,040 |
Related Party Transactions - Sc
Related Party Transactions - Schedule of Related Parties (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Related Party Transaction [Line Items] | |||
Incurred fees | $ 466 | $ 8,728 | |
Receivable | 987 | $ 837 | |
Payable | 5,155 | 10,883 | |
Cash to be received from an affiliate related to deferred compensation and other payroll costs | |||
Related Party Transaction [Line Items] | |||
Incurred fees | 0 | 658 | |
Receivable | 0 | 0 | |
Other fees | |||
Related Party Transaction [Line Items] | |||
Incurred fees | 150 | 0 | |
Receivable | 201 | 352 | |
Other fees | |||
Related Party Transaction [Line Items] | |||
Incurred costs | 0 | 20 | |
Payable | 0 | 0 | |
Costs advanced by the advisor | |||
Related Party Transaction [Line Items] | |||
Incurred costs | 1,546 | 2,571 | |
Payable | 1,120 | 1,164 | |
Consulting fee - shared services | |||
Related Party Transaction [Line Items] | |||
Incurred costs | 1,875 | 1,874 | |
Payable | 631 | 441 | |
Disposition fees | |||
Related Party Transaction [Line Items] | |||
Incurred costs | 0 | 641 | |
Payable | 0 | 0 | |
Leasing commissions | |||
Related Party Transaction [Line Items] | |||
Incurred costs | 0 | 596 | |
Payable | 0 | 0 | |
Acquisition fees | |||
Related Party Transaction [Line Items] | |||
Incurred costs | 0 | 942 | |
Payable | 0 | 0 | |
Earn-out | |||
Related Party Transaction [Line Items] | |||
Incurred costs | 0 | 0 | |
Payable | 338 | 2,919 | |
Stockholder Servicing Fee | |||
Related Party Transaction [Line Items] | |||
Incurred costs | 0 | 693 | |
Payable | 2,354 | 4,994 | |
Distributions | |||
Related Party Transaction [Line Items] | |||
Incurred costs | 8,353 | 10,089 | |
Payable | 712 | 1,365 | |
Total | |||
Related Party Transaction [Line Items] | |||
Incurred costs | 11,774 | 17,426 | |
Payable | 5,155 | 10,883 | |
Griffin Capital Corporation | Reimbursable Expense Allocation | |||
Related Party Transaction [Line Items] | |||
Incurred fees | 16 | 0 | |
Receivable | 5 | 4 | |
Griffin Capital Corporation | Payroll/Expense Allocation | |||
Related Party Transaction [Line Items] | |||
Incurred fees | 300 | 321 | |
Receivable | 781 | 481 | |
Griffin Capital Essential Asset REIT II | Payroll/Expense Allocation | |||
Related Party Transaction [Line Items] | |||
Incurred fees | 0 | 1,217 | |
Receivable | 0 | 0 | |
Griffin Capital Essential Asset REIT II | O&O Costs (including payroll allocated to O&O) | |||
Related Party Transaction [Line Items] | |||
Incurred fees | 0 | 157 | |
Receivable | 0 | 0 | |
Griffin Capital Essential Asset REIT II | Other fees | |||
Related Party Transaction [Line Items] | |||
Incurred fees | 0 | $ 6,375 | |
Receivable | $ 0 | $ 0 |
Related Party Transactions - Na
Related Party Transactions - Narrative (Details) | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Administrative Service Agreement | Griffin Capital Corporation | |
Related Party Transaction [Line Items] | |
Monthly service cost | $ 187,167 |
Operating Leases - Narrative (D
Operating Leases - Narrative (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020USD ($)leasenumberOfRenewals | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)leasenumberOfRenewals | Sep. 30, 2019USD ($) | |
Lessee, Lease, Description [Line Items] | ||||
Rental income | $ 234.9 | $ 212.8 | ||
Weighted average remaining lease term | 80 years 3 months 18 days | 80 years 3 months 18 days | ||
Operating lease costs | $ 0.9 | $ 0.7 | $ 2.8 | 1.9 |
Cash paid for operating lease liabilities | $ 0.4 | $ 0.3 | $ 1.2 | $ 0.8 |
Chicago Illinois Office | ||||
Lessee, Lease, Description [Line Items] | ||||
Weighted average remaining lease term | 5 years | 5 years | ||
Arizona | ||||
Lessee, Lease, Description [Line Items] | ||||
Number of parcels of land | lease | 3 | 3 | ||
Options to renew | numberOfRenewals | 0 | 0 |
Operating Leases - Future Minim
Operating Leases - Future Minimum Base Rents to be Received (Details) $ in Thousands | Sep. 30, 2020USD ($) |
Leases [Abstract] | |
Remaining 2020 | $ 72,450 |
2021 | 303,943 |
2022 | 305,905 |
2023 | 292,005 |
2024 | 251,481 |
Thereafter | 1,137,808 |
Total | $ 2,363,592 |
Operating Leases - Cash paid fo
Operating Leases - Cash paid for measurement of lease liabilities (Details) | Sep. 30, 2020 |
Leases [Abstract] | |
Weighted average remaining lease term | 80 years 3 months 18 days |
Weighted average discount rate | 4.98% |
Operating Leases - Remaining Re
Operating Leases - Remaining Required Payments Under Ground Leases (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
Remaining 2020 | $ 407 | |
2021 | 1,632 | |
2022 | 1,675 | |
2023 | 1,741 | |
2024 | 1,776 | |
Thereafter | 286,738 | |
Total undiscounted lease payments | 293,969 | |
Less: imputed interest | (248,483) | |
Total lease liabilities | $ 45,486 | $ 45,020 |
Declaration of Distributions -
Declaration of Distributions - (Details) - $ / shares | Sep. 29, 2020 | Aug. 25, 2020 | Jul. 28, 2020 | Jun. 15, 2020 |
Declaration of Distributions [Abstract] | ||||
Stock distributions declared (in usd per share) | $ 0.000956284 | $ 0.000956284 | $ 0.000956284 | $ 0.000956284 |
Common stock dividends, annualized equivalent (in usd per share) | $ 0.35 | $ 0.35 | $ 0.35 | $ 0.35 |
Subsequent Events - (Details)
Subsequent Events - (Details) $ / shares in Units, ft² in Millions | Nov. 04, 2020USD ($)shares | Oct. 19, 2020$ / shares | Sep. 29, 2020$ / shares | Aug. 25, 2020$ / shares | Jul. 28, 2020$ / shares | Jun. 15, 2020$ / shares | Sep. 20, 2017USD ($) | Oct. 28, 2020USD ($) | Sep. 30, 2020USD ($)propertystate$ / sharesshares | Sep. 30, 2019$ / shares | Sep. 30, 2020USD ($)propertystate$ / sharesshares | Sep. 30, 2019$ / shares | Nov. 06, 2020numberOfLeaseConcessions | Oct. 29, 2020USD ($)ft²propertystate$ / shares | Oct. 01, 2020 | Dec. 31, 2019USD ($)$ / shares |
Subsequent Event [Line Items] | ||||||||||||||||
Stock distributions declared (in usd per share) | $ 0.000956284 | $ 0.000956284 | $ 0.000956284 | $ 0.000956284 | ||||||||||||
Cash distributions declared per common share (in usd per share) | $ 0.09 | $ 0.13 | $ 0.32 | $ 0.46 | ||||||||||||
Asset value | $ | $ 4,223,950,000 | $ 4,223,950,000 | $ 4,175,502,000 | |||||||||||||
Number of properties owned | property | 99 | 99 | ||||||||||||||
Number of states | state | 25 | 25 | ||||||||||||||
Weighted average remaining lease term | 80 years 3 months 18 days | 80 years 3 months 18 days | ||||||||||||||
Common Stock, par value (in usd per share) | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||||||
Number of shares issued (shares) | shares | 283,769,972 | 283,769,972 | ||||||||||||||
Distribution Reinvestment Plan | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Proceeds from issuance of private placement | $ | $ 200,000,000 | |||||||||||||||
Subsequent Event | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Number of lease concessions | numberOfLeaseConcessions | 2 | |||||||||||||||
Subsequent Event | Distribution Reinvestment Plan | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Number of shares issued (shares) | shares | 32,707,229 | |||||||||||||||
Proceeds from issuance of private placement | $ | $ 315,800,000 | |||||||||||||||
Subsequent Event | CCIT II Merger | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Asset value | $ | $ 5,800,000,000 | |||||||||||||||
Number of properties owned | property | 125 | |||||||||||||||
Number of states | state | 26 | |||||||||||||||
Area of properties (in sq ft) | ft² | 31 | |||||||||||||||
Percentage of combined portfolio leased (percent) | 90.00% | |||||||||||||||
Weighted average remaining lease term | 7 years 4 months 24 days | |||||||||||||||
Percentage of combined portfolio leased to tenants or guarantors with investment Grade equivalent ratings (percent) | 58.00% | |||||||||||||||
Maximum individual representation by a tenant of Combined Company's net rent (percent) | 3.30% | |||||||||||||||
Share of Combined Company's net rents by top ten tenants (percent) | 25.00% | |||||||||||||||
Termination fee paid | $ | $ 7,380,000 | |||||||||||||||
CMFT expenses to be paid | $ | $ 3,690,000 | |||||||||||||||
Merger agreement threshold on acquisition proposal as a percentage of equity or assets (percent) | 50.00% | |||||||||||||||
Termination fee to be paid if acquisition proposal of 50% or more is consummated | $ | $ 18,450,000 | |||||||||||||||
Termination fee under Termination Agreement | $ | $ 1,750,000 | |||||||||||||||
Revolving Credit Facility | Line of Credit | Subsequent Event | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Threshold increase in asset value required for mergers (percent) | 25.00% | |||||||||||||||
Common Class E | Subsequent Event | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Stock distributions declared (in usd per share) | $ 0.000956284 | |||||||||||||||
Cash distributions declared per common share (in usd per share) | 0.35 | |||||||||||||||
Common Class E | Subsequent Event | CCIT II Merger | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Common Stock, par value (in usd per share) | $ 0.001 | |||||||||||||||
Number of shares to be received for each share converted | 1.392 | |||||||||||||||
Common Class T | Subsequent Event | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Stock distributions declared (in usd per share) | 0.000956284 | |||||||||||||||
Cash distributions declared per common share (in usd per share) | 0.35 | |||||||||||||||
Common Class T | Subsequent Event | CCIT II Merger | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Common Stock, par value (in usd per share) | $ 0.01 | |||||||||||||||
Common Class S | Subsequent Event | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Stock distributions declared (in usd per share) | 0.000956284 | |||||||||||||||
Cash distributions declared per common share (in usd per share) | 0.35 | |||||||||||||||
Common Class D | Subsequent Event | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Stock distributions declared (in usd per share) | 0.000956284 | |||||||||||||||
Cash distributions declared per common share (in usd per share) | 0.35 | |||||||||||||||
Common Class I | Subsequent Event | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Stock distributions declared (in usd per share) | 0.000956284 | |||||||||||||||
Cash distributions declared per common share (in usd per share) | 0.35 | |||||||||||||||
Common Class A | Subsequent Event | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Stock distributions declared (in usd per share) | 0.000956284 | |||||||||||||||
Cash distributions declared per common share (in usd per share) | 0.35 | |||||||||||||||
Common Class A | Subsequent Event | CCIT II Merger | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Common Stock, par value (in usd per share) | $ 0.01 | |||||||||||||||
Common Class AA | Subsequent Event | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Stock distributions declared (in usd per share) | 0.000956284 | |||||||||||||||
Cash distributions declared per common share (in usd per share) | 0.35 | |||||||||||||||
Common Class AAA | Subsequent Event | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Stock distributions declared (in usd per share) | 0.000956284 | |||||||||||||||
Cash distributions declared per common share (in usd per share) | $ 0.35 |